Academic papers
A roadmap for branding
in industrial markets
Received (in revised form): 26th February, 2004
FREDERICK E. WEBSTER, Jr
is the Charles Henry Jones Third Century Professor of Management, Emeritus, at the Amos Tuck School of
Business at Dartmouth College. He is known internationally for his research, writing, teaching and consulting in
industrial marketing strategy and organisation. His research-based writing has produced more than 75 papers in
the top academic and management journals and 15 books.
KEVIN LANE KELLER
is the E. B. Osborn Professor of Marketing at the Amos Tuck School of Business at Dartmouth College. His
academic resumé includes degrees from Cornell, Duke and Carnegie-Mellon universities, award-winning research,
and prior faculty positions at Berkeley, Stanford and UNC. His textbook, Strategic Brand Management, has been
adopted at top business schools and leading firms around the world, and has been proclaimed the ‘bible of
branding’.
Abstract
Branding theory has been largely developed in the context of consumer products; yet, most
economies are characterised by a preponderance of firms selling business-to-business or industrial
products. Understanding how branding works in industrial markets is thus a priority. In this paper
some of the distinguishing characteristics of industrial branding are outlined, and some guidelines as
to success with industrial brands are offered.
INTRODUCTION
Frederick E. Webster, Jr
6236 N. Ventana View Place,
Tucson, AZ 85750, USA
Tel: ⫹1 520 615 9751
E-mail: frederick.e.webster.jr@
dartmouth.edu
388
Virtually all discussions of branding
are framed in a consumer marketing
context.1 Among the many reasons for
this emphasis are the greater visibility
and magnitude of expenditure for consumer brand development and promotion, and the fact that consumer brands
dominate the mass media to which
people are exposed on a daily basis.
It is wrong, however, to conclude
that branding is not as important and
valuable to industrial (or ‘business-tobusiness’ (B2B)) marketers as it is to
consumer marketers.2
A moment’s reflection will suggest
that some of the most valuable and
powerful brands in the world belong to
industrial marketers: ABB, Caterpillar,
Cisco, DuPont, FedEx, GE, Hewlett
Packard, IBM, Intel and Siemens are
just a few of the many examples that
spring to mind. Four of the five most
valuable brands in the world, according
to the annual Business Week/Interbrand
ranking, are brands sold to or specified
by industrial buyers: Microsoft, IBM,
GE and Intel. (It should be noted that
the customer franchises for these four
brands number in the millions, giving
them some of the characteristics of
consumer market brands, yet they also
can be deemed industrial brands. The
authors return to this consideration
later in the paper.) Only Coca–
Cola has more value.3 Other industrial companies that have recently
publicly placed emphasis on building
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 11, NO. 5, 388–402 MAY 2004
A ROADMAP FOR BRANDING IN INDUSTRIAL MARKETS
or strengthening their brands include
Boeing, Emerson Electric and Praxair.
These examples illustrate that strong
brands can be found in industrial
markets for both goods and services,
and for both large-dollar-value capital
equipment and less expensive, frequently purchased products.
The purpose of this paper is to
examine the similarities in, and differences between, consumer and industrial brands, to assess the somewhat
unique role of branding in the success of B2B marketing, and to offer
some guidelines for building successful B2B brands. In their discussion,
the authors integrate relevant concepts
from branding, industrial marketing
strategy and organisational buying behaviour.
THE BASICS OF BRANDING STRATEGY
In the authors’ view, a brand can
best be thought of as a psychological phenomenon. Formally, a brand
is a name, sign, symbol or logo
that identifies the goods and services of one seller and differentiates
them from others. Via personal experiences, commercial messages, interpersonal communications and other
means, however, a brand takes on
meaning with customers. The power
of a brand resides in the minds of
customers and all the thoughts, feelings, perceptions, beliefs, attitudes,
behaviour and so on that result from
the myriad of possible brand interactions. The brand surrounds a product
or service with meaning that differentiates it from other products or services intended to satisfy the same
need. (Other accepted perspectives on
branding exist, approaching brands as
symbols, collections of attributes, con-
sumption communities, benefit bundles
and personalities.)
A brand is thus much more than
a name, and branding is a strategy
problem, not a naming problem. A
brand is a valuable intangible asset and
must be managed carefully so that its
meaning is preserved and enhanced,
and so that customers form strong
bonds as a result. A number of important principles of brand management
are relevant to industrial branding, and
several of these are highlighted here.
Two components of the psychological meaning of a brand are brand
awareness and brand image. Customers
must know what products or services
are associated with a brand (brand
awareness) and must know what attributes and benefits the brand offers and what makes it better and
distinctive (brand image). Industrial
brands can differentiate themselves on
the basis of a whole host of attributes and benefits that range in
tangibility and their relationship to
the product. Some associations will
be linked to the brand’s functional
performance (for example, based on
the product’s value proposition and
promised benefits); other associations
will reflect more abstract considerations
(for example, corporate image dimensions embodying such attributes as
credibility, reliability, trust, ethics and
corporate social responsibility).
Branding is a core marketing activity. ‘To brand or not to brand?’ is not
the question. Every company has a
name that will function as a brand if
nothing else is done. For many industrial marketers, the company name
is the brand. The question is ‘What do
you want your name to stand for? and
What do you want it to mean in the
mind of the customer?’. Every touch
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 11, NO. 5, 388–402 MAY 2004
389
WEBSTER AND KELLER
point between the company and the
customer becomes an input to brand
image. Either the brand must be
managed as a strategic asset or it will
be managed by customers more or
less at random. Properly managed,
an industrial brand can realise the
same advantages as a consumer brand
— such as greater loyalty, price
premiums, the ability to extend into
other categories, and so on.4
Brand positioning incorporates the
core values of the brand, and should
have both points of parity and points
of difference vis-à-vis competitors’
product offerings. Points of difference
are strong, favourable, unique brand
associations that drive customers’
behaviour; points of parity are those
associations where the brand ‘breaks
even’ with competitors and negates
their intended points of difference. The
core brand promise or brand mantra is
an internal marketing expression that
captures the key points of difference
that are the essence and spirit of the
brand in a three to five-word phrase.
The brand mantra is the basis for the
brand slogan, which is a translation of
the mantra in consumer-friendly
language that is used in advertising and
other communications.
For example, Nike’s internal brand
mantra is ‘authentic athletic performance’ but externally they use the
brand slogan ‘Just Do It’ as the
signature to many of their advertisements. Examples of slogans for
industrial brands which reflect underlying brand mantras are Agilent
Technologies’ ‘Dreams Made Real’,
Emerson’s ‘Consider it Solved’, GE’s
‘Imagination at Work’, Hewlett Packard’s ‘Invent’, Novell’s ‘The Power to
Change’, United Technologies’ ‘Next
Things First’ and Xerox’s ‘The Docu390
ment Company’. The development,
history and positioning of a brand are
summarised in the brand charter. Every
marketing action must be evaluated
against, and be consistent with, the
brand charter.
Strong brands have a consistent
brand image for each individual customer and across the customer population. Brand strength reflects the quality
and consistency of the firm’s marketing
efforts and the care with which the
brand has been managed over time. To
be successful, the brand must be
consistent with the firm’s strategy and
the major tool of strategic marketing
management.
INDUSTRIAL MARKETING STRATEGY:
SEGMENTATION, TARGETING AND
POSITIONING
In all markets, business and consumer, the successful development
and management of a brand begins
with the fundamentals of marketing
strategy and the development of a
marketing programme.5 While this
should be obvious, it is not uncommon to find companies launching
major branding activities before the
basic work of marketing strategy has
been done. The short-lived madness
of expensive but ill-advised national
advertising campaigns, that were
hallmarks of the dot.com debacle of
the late 1990s, is perhaps the most
dramatic example. The problem is,
however, more widespread, as companies that have not had strong
marketing programmes latch onto
widespread renewed interest in the
concept of branding and try to launch
a branding campaign before they have
completed the work of formulating
a marketing strategy.
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 11, NO. 5, 388–402 MAY 2004
A ROADMAP FOR BRANDING IN INDUSTRIAL MARKETS
Industrial branding must be rooted
in marketing strategy, the well-known
fundamentals of which involve market
segmentation, targeting and positioning. Superior marketing is relevant,
distinctive, consistent, cohesive and
creative, and this leads to superior customer awareness, preference
and buying action. Superior customer knowledge about and preference
for the firm’s value offering yields
competitive superiority, support from
partners in the value chain (including vendors, resellers and customers),
and lower costs through greater efficiency and effectiveness in spending
for marketing activities.
Following a procedure outlined by
Best,6 Rozin and Magnusson7 have
described the development of a global
branding strategy, for a new Dow
Corning industrial product, consisting
of a seven-step process. The process
begins with a focus on customer needs,
not the product. The steps are:
(1) Needs-based
segmentation:
Grouping customers into segments
according to their needs and the
benefits sought.
(2) Segment identification: Selecting customer characteristics including usage behaviour that make the
segment distinctive and actionable.
(3) Segment attractiveness: Evaluating the business value in terms of
economic value and strategic fit of
each needs-based segment.
(4) Segment profitability: Estimating the net contribution to marketing profit from each potential
segment.
(5) Segment positioning: Creating a value proposition and
product/price offering based on the
customers’ needs and buying
characteristics within each segment.
(6) Segment ‘acid test’: Creating
and testing ‘segment storyboards’
(communications) for implementing each segment’s positioning.
(7) Marketing mix strategy: Creating a complete marketing programme (product, price, promotion
and distribution) to implement the
positioning strategy.
There is nothing in the model of
marketing strategy (market segmentation, targeting and positioning)
that differentiates between consumer
markets and industrial markets. The
basics of sound marketing are immutable.
CHARACTERISTICS OF INDUSTRIAL
MARKETS
Industrial markets are characterised by
their buyers, not their products.
Industrial markets consist of profitseeking business firms and budgetconstrained
institutions
such
as
government
agencies,
healthcare
delivery organisations, educational
institutions and not-for-profit organisations. For business firms as customers,
a key characteristic is that demand for
their goods and services is derived,
directly or indirectly, from the demand
of other business firms, households, or
individuals for the products that those
firms produce. These firms’ purchases
are therefore guided, importantly, by
their own strategy for delivering value
to their customers and their owners in
the form of attractive and differentiated
product offerings and lower costs of
production and service. A given
manufacturer’s or service firm’s brand is
an asset to its customers, and
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 11, NO. 5, 388–402 MAY 2004
391
WEBSTER AND KELLER
association with that brand can also be
a benefit for the suppliers of that firm.
Every firm in the value chain benefits
from a strong brand. Branded industrial
products and services often become
part of the customer firm’s product
offering, such as ‘Intel Inside’ for
personal computers, Motorola telephones for Mercedes Benz, and FedEx
delivery as part of the product offering
of L. L. Bean or UPS delivery for
Lands End.
It is common for industrial
marketers to derive a major portion of
their total revenue and profit from a
relatively small number of customers.
This would be obvious in the
case of commercial and military
aircraft manufacturers, original equipment manufacturers (OEMs) and
automotive parts suppliers, for example. The typical industrial firm
probably has no more than a few
hundred customers, with maybe five to
ten accounting for over half of its total
sales. The strength of the Boeing brand
of airliners or the GE brand of jet
engines has value for their commercial
airline customers.
Industrial goods and services can be
classified in several different ways. One
common typology defines the following: raw materials; processed materials;
component parts; subassemblies; light
equipment; heavy capital equipment;
construction; maintenance, repair and
operating (MRO) supplies; and services. Services can be further categorised
to include financial, logistical, medical,
educational, maintenance and repair,
management consulting, marketing,
technical, data-processing and information management, and a host of other
services. Some services are bought in
connection with the purchase, installation and operation of physical
392
products, while others are stand-alone
or ‘intangible’ services such as tax
advice or investment banking. Brand
names serve as differentiating features
in each of these product and
service categories, which include some
of industrial marketing’s strongest
brands such as Bechtel (construction),
Cargill (raw materials), Caterpillar
(heavy equipment), DuPont (processed
materials), Emerson Electric (component parts and subassemblies, as well
as systems), McKinsey (consulting),
Mobil (MRO supplies — fuels and
lubricants), Morgan Stanley (banking)
and Xerox (light equipment).
Branding strategy obviously needs
to be tailored to the specific product
type. For many raw and processed
materials and many types of component and subassembly, the product is
inevitably tending towards commodity
status as technology-based differences
disappear and buyers become more
knowledgable and increasingly focus
on price. Branding in these market
conditions must emphasise points of
difference in service and other intangibles, such as company reliability and
technical expertise, as the basis for
differentiation and a superior value offering. For capital equipment, the focus
may shift more to the product offering
itself, with an emphasis upon underlying technology and product performance attributes, or it may also be the
superior reliability, sophistication and
experience of the marketing company.
THE UNIQUENESS OF INDUSTRIAL
BUYER BEHAVIOUR
Industrial markets are distinctive
primarily because of their profitmotivated and budget-constrained customers, not their products. These
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 11, NO. 5, 388–402 MAY 2004
A ROADMAP FOR BRANDING IN INDUSTRIAL MARKETS
customers are different from consumers
because of the size of their purchases,
the concentration of their buying
power, the nature of the relationships
they demand from their suppliers, and,
perhaps most importantly, their buying
process. Industrial buying is, in most
respects, different from that of the
individual or household consumer.
Industrial buying is a combination of
individual and organisational decisionmaking processes, and brands have
influence on both sets of processes.
Buying behaviour involves individuals
making decisions in interaction with
other people, both within and outside
their organisations, in the context of
their organisation’s goals, resources,
strategy and structure. The organisation
in turn is operating in the context of an
economic, physical (ie geographic and
climatic), political, technical, legal
and social/cultural environment that
is continuously changing.8 Industrial
buying decisions typically involve
many actors, take place over a long
period, and go through a series of
decision stages.
Types of industrial buying
The role played by the industrial brand
will vary with the type of buying
situation. There is a continuum of
types of buying situation based on the
complexity of the problem being
solved, the newness of the buying
requirement, the number of people
involved, and the time required. The
process itself consists of a number of
decision stages from problem recognition through the development of
specifications, the identification and
evaluation of vendors and product
offerings, the choice of one or more
vendor, the negotiation of buying
terms, the evaluation of performance,
and the management of the ongoing
relationship. There are obviously many
different ways to characterise this
process in terms of the number of steps
and sub-steps. Types of buying situation can further be defined in terms of
the newness of the buying problem
from straight re-buy or routine purchase behaviour through modified rebuy or limited problem solving to new
buy or extensive problem solving.
Mudambi9 reported research finding three clusters of buyers based on
the perceived importance of branding:
‘branding receptive’, ‘highly tangible’
and ‘low interest’. These were correlated with the type of purchase situation. Branding-receptive buyers were
found in more risky purchase situations
and tended to be formal and thorough
but open-minded. They tended to use
more suppliers than those buyers in the
other segments. They were said to be
more sophisticated, perhaps better educated, and to buy in larger volumes.
Highly tangible buyers, on the other
hand, were characterised by typical
product-oriented modified re-buys and
‘went by the book’ in a structured
process. The ‘low interest’ buyers were
characterised by transaction-oriented,
straight re-buy procurements based on
convenience and low involvement.
Over time, new-buy situations become re-buys and routine purchase
behaviour. The established supplier will
attempt to avoid a new-buy situation
for the products now being purchased,
whereas potential vendors will try to
create a modified re-buy or new-buy
situation. The marketer’s brand will
play different roles in these different
situations. In the routine repurchase,
the brand will be a driver for customer
loyalty. In new-buy situations, the
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 11, NO. 5, 388–402 MAY 2004
393
WEBSTER AND KELLER
manufacturer’s brand name recognition
and brand promise will be important in
establishing trust and in encouraging
the customer’s willingness to consider change in purchasing preferences
and behaviour. New brands obviously
create a new-buy or modified re-buy
situation for the potential market.
Buying centres
The participants in the buying process
can be described in terms of their
roles in the buying process. These
roles have been defined as initiators,
users, buyers, deciders, influencers and
gatekeepers:10
— Initiators: Define the buying situation and start the buying process.
— Users: Actually use the product.
— Buyers: Can commit the organisation to spend money.
— Deciders: Have the authority to
choose among potential product offerings and vendors.
— Influencers: Add information or
constraints in the buying process.
— Gatekeepers: Can control the flow
of information into the buying
process.
This buying decision-making unit
(DMU) is often called the ‘buying
centre’. Several individuals can occupy
a given role (for example, there may be
many users or influencers), and one
individual may occupy multiple roles.
A purchasing manager, for example,
often occupies simultaneously the roles
of buyer, influencer and gatekeeper —
he or she can determine which sales
representatives can call on other people
in the organisation, what budget and
other constraints to place on the
purchase, and which firm will actually
394
get the business, even though others
(deciders) may select two or more
potential vendors who can meet the
company’s requirements. The typical
buying centre has many members,
typically a minimum of five or six, and
often dozens. The buying centre may
include people outside the target
customer organisation, such as government officials, consultants, technical
advisors and other members of the
marketing channel.
Strong
brand
awareness
and
favourable
attitudes
among
the
dispersed members of the buying
centre can exert major influence
throughout
the
process.
Some
members of the buying centre
(deciders) may have the authority to
decide on behalf of the organisation,
and could conceivably behave in an
autocratic,
authoritarian
manner.
Others may have veto power and the
ability to overturn any decision made
by another individual or by the buying
group as a whole. Typically, however,
there will be some kind of a
group-decision-making rule such as
consensus or one man one vote, using
such interpersonal influence processes
as persuasion, compromise, bargaining
and negotiation. Individuals will be
subject
to
many
social
and
interpersonal influences within the
buying centre at multiple levels within
the organisation. They may be loyal to
the needs of their particular department
or division, even as they attempt to
find a solution to the buying problem.
The need to achieve consensus in the
industrial buying process in order to
arrive at a group decision is a major
driver of the necessity and value of
branding if industrial markets. The
brand can be a major tool for achieving
a
consensus
in
organisational
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 11, NO. 5, 388–402 MAY 2004
A ROADMAP FOR BRANDING IN INDUSTRIAL MARKETS
perceptions, predispositions and buying
action.
Each member of the buying centre
is likely to give priority to very
different decision criteria. For example,
engineering personnel may be concerned primarily with maximising the
actual performance of the product;
production personnel may be concerned mainly with ease of use and
reliability of supply; financial personnel
may focus on initial purchase price;
purchasing may be concerned with
operating and replacement costs; and
union officials may emphasise safety
issues. While each of these participants
may be trying to minimise both the
risk of product performance and the
psychosocial risk of making a decision
that will be judged by others, each may
also define those risks in a different
way. Getting all the participants in the
DMU to the same conclusion and
getting a commitment out of the
organisation is usually a very complicated process.
As a general proposition, the more
complex the buying process in terms
of the complexity of the procurement
problem, the size and scope of the
DMU, and the amount of time
required, the more valuable a strong
brand becomes in helping to achieve
organisational consensus and decisions.
Strong brands and strong brand
loyalty can be major assets for
industrial marketers because of the
preference of organisations collectively,
and their members individually, to
avoid risk taking in buying decisions. The organisation’s evaluationand-reward system may implicitly
provide incentives for brand loyalty by
encouraging the choice of tried-andtrue or at least familiar and respected
brands.
Industrial buying dynamics
The fundamental point is that individuals, not organisations, make decisions. These individuals are motivated
by their own needs and perceptions as
they do their organisational work in an
attempt to maximise the rewards (pay,
advancement, recognition and feelings
of achievement) offered by the organisation. These pay-offs are earned
based on the system of performance
evaluation and reward within the
organisation. The buying organisation
has goals, resources, structure and
systems that guide and constrain the
actions of the individuals within the
organisation. Each individual is trying
to achieve organisational goals subject
to resource and other constraints in a
way that minimises risk and maximises
the probability of pay-offs, consistent
with his or her individual needs and
goals.
Personal needs motivate the behaviour of individuals but organisational needs legitimate the buying
decision process and its outcomes.
People are not buying products. They
are buying solutions to two problems:
the organisation’s economic and
strategic problem and their own
personal desire to obtain individual
achievement and rewards. In this sense,
industrial buying decisions are both
rational and emotional, as they serve
both the organisation’s and the
individual’s needs.
In the typical buying decision,
however, the solution to the organisation’s problem will tend to take
precedence over the individual’s needs,
especially when it comes to providing
a rationale for the choices made.
Economic and functional appeals normally will be dominant in the brand
value proposition, although emotional
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 11, NO. 5, 388–402 MAY 2004
395
WEBSTER AND KELLER
appeals may be appropriate from time
to time, but must be used carefully. For
example, the dominant brand attribute
may be the rational/functional one of
superior product performance, but the
emotional/motivating appeal might be
that the buyer cannot afford the
psychosocial risk of buying the product
from another, perhaps less well-known
or less reliable vendor. Some industrial
service brands, FedEx for example, are
positioned as choices that will make
the buyer look good to his or her
boss or colleagues. But they will
look good because the product performs well, not because of some
hidden psychological or ego-enhancing
benefit. For this reason, product-related
brand associations are likely to play
a more important role than nonproduct-related associations for successful industrial branding. At the
same time, product associations and
brand positioning must be responsive to individual needs, perceptions
and incentives, offering relevance and
salience for the individual as well as the
organisation.
INDUSTRIAL BUYING AND
RELATIONSHIP MANAGEMENT
Over the past decade or so, both
buying practice and marketing theory
have moved towards a view of
industrial buying and marketing as
relationship management.11 This represents a significant shift away from the
dominant paradigm of an adversarial
relationship in which buyer and seller
attempt to maximise their own benefit
in the transaction as a zero-sum ‘I win,
you lose’ game. The focus has shifted
from transactions and conflict to
long-term relationships and cooperative buyer–seller behaviour. Compared
396
with earlier practice, industrial customers now rely upon fewer vendors
for their requirements, with longerterm contracts for a larger portion of
their total needs. While prices and
margins may be somewhat lower under
these conditions, marketers often
benefit from the more reliable revenue
stream, lower costs to serve, and lower
marketing costs. Industrial buyers in
turn obtain a more complete and
reliable solution to their problem, often
at lower prices and lower total cost of
procurement.
Not all customers are relationship
customers, however. There is a
continuum of procurement situations
and customer types from pure
transactions to strategic alliances.
In the middle are increasingly
strong buyer–seller relationships, from
repeated transactions through simple
relationships and strategic buyer–seller
partnering, to integrated firm-to-firm
alliances. Unique market segments can
be defined at multiple points on this
continuum. One company in the
chemical industry, for example, identified segments ranging from ‘low-price
seekers’ to ‘dial toners’ who simply
wanted to call up and place an order at
a fair price, ‘techies’ who valued the
firm’s scientific expertise to ‘win-win
partners’ who wanted a full strategic
partnership with their supplier. A
strong branding programme has been
developed to appeal across these
different segments.
Industrial brands may have different
roles to play in different market
segments. Relationship and partnership
customers will be likely to place greater
value on the trustworthiness, reliability
and corporate credibility dimensions.
Transactions customers may focus more
on product performance, pricing and
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 11, NO. 5, 388–402 MAY 2004
A ROADMAP FOR BRANDING IN INDUSTRIAL MARKETS
tangible service attributes.
To summarise, industrial branding
must take into account the complexity
of the industrial or organisational
buying process. Not only must the
brand image have value and relevance
for the individual decision makers, but
it must have meaning that can be
shared among them. It must appeal to
the needs and perceptions of people
in different buying roles with different frames of reference and different
buying criteria, people who often live
in different thought worlds.
In strategic buyer–seller relationships, the partner who owns the
strongest brand is likely to own the
relationship with the customer. This
fact has profound importance in terms
of the firm’s control over its position in
the value chain. Intel, as a supplier of computer chips, has done
a masterful job with its ‘Intel Inside’ campaign, managing a complex
relationship with its OEM computer
customers and maintaining control
over the Intel brand so that it has
value for both OEMs and end users.
Microsoft provides another good example.
BRANDING STRATEGIES FOR
INDUSTRIAL BRANDS
Observation suggests that the typical
industrial brand is the company name,
from ABB to Xerox. The company blanket brand (GE for example) may be applied to a wide
range of products from components
(lamps) to light equipment (switch
gear), heavy equipment (turbines) and
even construction (turnkey powergeneration plants). Some industrial
marketers, of course, also employ
sub-brands for individual product lines,
such as Praxair’s Medipure brand of
medical oxygen, GE’s Lexan plastic,
DuPont’s Teflon coating and Intel’s
Pentium chip, but seldom are these
sub-brands divorced from the company
brand.
This practice is consistent with the
fact that industrial marketing and
buying are increasingly focused on
relationships, not individual transactions. The customer wants an ongoing
relationship with a reliable supplier of
quality products and services. The
relationship is company-to-company.
The brand is a relationship between
buyer and seller. The characteristics of
the supplying firm — its financial
strength, its reputation for ethical
dealing, its record of reliable delivery
and service, its technical expertise, its
ability to control production processes,
and so on — are likely to be even
more important than the quality of its
products per se. The quality of the
product is a given, the ‘table stakes’ in
the competitive game; the characteristics of the company as a supplier are
often the key differentiators.
This is in marked contrast to many
consumer products, especially frequently purchased goods found in
broad distribution. The consumer
probably does not care which of several
competing firms has manufactured the
disposable nappies he or she buys; the
nappy manufacturer cares greatly
which suppliers of linerboard and
printing it is depending upon for the
packaging that will contain and display
its product on the retailers’ shelves.
In terms of economic value, brand
strength becomes more important and
the brand becomes more valuable as a
strategic asset as the size of the user
base increases and users play a more
important role in the buying process.
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 11, NO. 5, 388–402 MAY 2004
397
WEBSTER AND KELLER
Thus the leading brands in the industrial market in terms of estimated
financial market value — Microsoft,
IBM, GE and Intel — represent
products familiar to millions of users.
The brand value comes from the
present and future value of earnings on
sales to individual users of these
companies’ products. But this does not
mean that the product becomes a
consumer product. Whereas brand
promotion by these manufacturers may
create enhanced perception of value on
the part of the actual user, the
development of purchase specifications,
the buying process itself, and the actual
purchase are done by the businesses
that buy these products and incorporate them into their operations and
product offerings. Someone may use an
IBM computer in their work, but it
is owned and maintained by their
employer. The attributes incorporated
in the brand value proposition must be
meaningful for the buyers, users, influencers and deciders in the organisational buying-decision process.
GUIDELINES FOR SUCCESSFUL
INDUSTRIAL BRANDS
Drawing lessons from this brief overview of the essentials of the industrial
buying process and industrial marketing strategy, it is possible to develop
some simple guidelines to deal with
the uniqueness and complexity of industrial branding. These guidelines are
based on judgments derived from the
preceding analysis, although each of
them raises potential additional research
questions for marketers and academic
investigation. The guidelines are:
(1) The role and importance of
branding should be tied directly
398
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
into the industrial marketer’s
business/profit model and valuedelivery strategy.
Understand the role of the brand
in the organisational buying
process.
Be sure the basic value proposition has relevance for all
significant players in the decisionmaking unit and decision-making
process.
Emphasise a corporate branding
approach.
Build the corporate brand around
brand intangibles such as expertise, trustworthiness, ease of doing
business and likeability.
Avoid confusing corporate communication strategy and brand
strategy.
Apply
detailed
segmentation
analysis
within
and
across
industry-defined segments, based
on differences in the composition
and functioning of buying centres
within those segments.
Build brand communications
around the interactive effects of
multiple media.
Adopt a top-down and bottomup brand management approach.
Educate the entire organisation as
to the value of branding and the
organisation’s role in delivering
brand value.
1. The role and importance of
branding should be tied directly into
the industrial marketer’s
business/profit model and
value-delivery strategy
The starting point for the business
model should be the firm’s distinctive
competence, its target market and
customers, its position in the value
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 11, NO. 5, 388–402 MAY 2004
A ROADMAP FOR BRANDING IN INDUSTRIAL MARKETS
chain, and its strategy for delivering
superior value to those chosen customers. These strategic basics should be
embedded in the brand value proposition and brand mantra. Then the
industrial brand should be managed as
a strategic asset with appropriate commitment of resources, managerial attention and controls.
2. Understand the role of the brand
in the organisational buying process
Use market research to identify the
composition of the buying centre
(DMU) and the decision-making
criteria used by the members of the
organisation who occupy the key roles
in the DMU. This analysis will lead to
the definition of unique market
segments. Understand the importance
of various company and product
attributes to the decision makers and
identify the key differentiators versus
competition by segment. This requires
an understanding of the organisation’s
evaluation and reward systems and how
different company and product characteristics are viewed in relation to the
buyer’s business strategy.
3. Be sure the basic value
proposition has relevance for all
significant players in the
decision-making unit and
decision-making process
There will be many people involved in
any buying decision and they all must
find the brand promise both relevant
and responsive to their needs and concerns. The brand promise must be
consistent with both the organisation’s
goals and the individual’s needs as they
are related to the attainment of organisational goals.
4. Emphasise a corporate branding
approach
It is important to remember the
significance
of
the
buyer–seller
relationship and the central role played
by the buyer’s corporate credibility and
reliability. To achieve this kind of
single-minded focus and clarity of
brand imaging and positioning, it is
advisable to use sub-brands selectively,
and to use as few descriptive modifiers
as possible with the company brand
name.
5. Build the corporate brand around
brand intangibles such as expertise,
trustworthiness, ease of doing
business and likeability
Use these values as a means to establish
corporate credibility, reputation and
distinctiveness.12 These are the values
that will enhance the firm’s value as a
strategic partner for its customers.
These general concepts must, however,
be made real by reference to specific
company attributes, activities and experiences.
6. Avoid confusing corporate
communication strategy and brand
strategy
In addition, the relationship between
the two sets of activities should be
carefully managed to avoid potential
conflict. The focus of brand strategy
should be on the brand as a strategic
entity and what it means for the customer, not on the broader issues of
corporate citizenship that may or may
not be relevant for buyers. The brand
must be much more than the company name. The distinction between
corporate communication and brand
strategy becomes especially important
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 11, NO. 5, 388–402 MAY 2004
399
WEBSTER AND KELLER
when the firm needs to manage a
public relations crisis.
7. Apply detailed segmentation
analysis within and across
industry-defined segments, based on
differences in the composition and
functioning of buying centres within
those segments
Brand positioning within those subsegments must then be tailored to the
unique needs of the individuals in
those segments but, just as importantly, must build upon and be consistent with the overall corporate brand
positioning. The challenge here will
be especially great if the company
develops unique products and services
for these sub-segments and individual
product or market managers begin to
lobby for distinct brands. The more
dispersed the firm’s product offering,
the stronger the arguments in favour
of distinct brands for separate business units and the greater the need
for top-level, global brand strategy
development, coordination and execution.
8. Build brand communications
around the interactive effects of
multiple media
While building brand communications,
recognise that budgets are usually
smaller than in consumer marketing. In
addition, mass media are likely to be
very limited in terms of reach and
availability. Specialised media such as
industry trade shows, educational activities and professional journals may be
most effective in reaching specific
sub-segments of buyers within customer organisations.
The following potential com400
munication options are available for
industrial buyers:
— media advertising (TV, radio,
newspaper, magazines)
— trade journal advertising
— directories
— direct mail
— brochures and sales literature
— audio-visual presentation tapes
— giveaways
— sponsorship or event marketing
— exhibitions, trade shows and conventions
— publicity or public relations.
A specific challenge is managing sales
force communications and sales support
in ways that are consistent with the
overall brand strategy. The difficulty is
that the sales force has a short-term
planning horizon and may engage in
activities that compromise brand equity
in the long-run (for example, making
promises that cannot be delivered).
Training, compensation and incentives
must be employed to help convince
the sales department of the long-term
value of having a strong corporate
brand and of their importance in maintaining — and ideally enhancing —
brand equity.
9. Adopt a top-down and bottom-up
brand management approach
Top-down brand management involves
marketing activities that capture the
‘big picture’ and recognise the possible
synergies across products and markets
to brand products accordingly. Particular attention is paid to how best to
develop and leverage the corporate
brand. Managing industrial brands in a
top-down fashion requires centralised
and coordinated marketing guidance
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 11, NO. 5, 388–402 MAY 2004
A ROADMAP FOR BRANDING IN INDUSTRIAL MARKETS
and actions from high-level marketing
supervisors and senior executives of the
firm. Given that many senior executives — and CEOs in particular —
with companies dealing in industrial
products have not risen to the top via
a marketing route, it is crucial to
ensure that they understand, embrace
and communicate branding principles.
Bottom-up brand management, on the
other hand, requires that marketing
managers primarily direct their marketing activities towards maximising brand
equity for individual products for particular business units and markets. Both
pairs of brand management activities
can be complementary and mutually
reinforcing.
10. Educate the entire organisation
as to the value of branding and the
organisation’s role in delivering brand
value
Whereas a few individuals may be
responsible for developing brand
strategy, the whole organisation is
responsible for its implementation.
Industrial products and brands are
likely to have multiple customer ‘touch
points’, each of which must be
managed consistently with the brand
image. Customers’ perceptions of the
brand are influenced by every contact
they have with the company and its
products. Value delivery ‘in the field’
must be consistent with the value
proposition of the brand strategy. Every
person in the organisation must
understand the brand strategy, be
committed to it, and understand
specifically how their behaviour
contributes to its execution. Evaluation
of performance and subsequent rewards
must be consistent with the specific
behaviour called for by the brand
strategy and value proposition. It is not
too much to suggest that each person’s
job description should be explicit in
this regard and this responsibility
acknowledged during the performance
review session.
SUMMARY
The recent upsurge in interest in
brand equity and brand strategy has
had an impact on industrial marketing as B2B marketers refocus on
their corporate names and brands.
While most discussions of branding have tended to ignore industrial
markets, the fundamentals of sound
brand strategy — beginning with
market segmentation, targeting and
positioning — apply. But the uniqueness of industrial markets, and especially of the organisational buying
process, must be taken into account in
developing a sound industrial branding
strategy. The result can be the creation
of better-differentiated product offerings, stronger relationships between
industrial marketers and their customers, more customer loyalty, better
responses to company innovations and
marketing expenditures, and the creation of more value for customers and
the firm.
References
(1) Aaker, D. A. (1996) ‘Building Strong
Brands: Building, Measuring, and Managing
Brand Equity’, The Free Press, New York,
NY; Keller, K. L. (1998) ‘Strategic Brand
Management’, Prentice-Hall, Upper Saddle
River, NJ.
(2) Shipley, D. and Howard, P. (1993) ‘Brand
naming industrial products’, Industrial
Marketing Management, Vol. 22, No. 1, pp.
59–66; Mudambi, S., Doyle, P. and Wong,
V. (1997) ‘An exploration of branding in
industrial markets’, Industrial Marketing
Management, Vol. 26, pp. 453–466.
(3) Khermouch, G. and Brady, D. (2003)
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 11, NO. 5, 388–402 MAY 2004
401
WEBSTER AND KELLER
(4)
(5)
(6)
(7)
(8)
402
‘Brands in an age of anti-Americanism’,
Business Week, 4th August, pp. 47–54.
Frith, M. (1993) ‘Price setting and the
value of a strong brand name’, International
Journal of Research in Marketing, Vol. 10,
December, pp. 381–386; Gordon, G. L.,
Calantone, R. J. and Di Benedetto, C. A.
(1993) ‘Brand equity in the
business-to-business sector: An exploratory
study’, Journal of Product and Brand
Management, Vol. 2, No. 3, pp. 4–16;
Hutton, J. G. (1997) ‘A study of brand
equity in an organizational context’, Journal
of Product and Brand Management, Vol. 6,
No. 6, pp. 428–439.
Rozin, R. S. and Magnusson, L. (2003)
‘Processes and methodologies for creating a
global business-to-business brand’, Journal of
Brand Management, Vol. 10, No. 3, February,
pp. 185–207.
Best, R. (2000) ‘Market-Based
Management’, Prentice-Hall, Upper Saddle
River, NJ, p. 110.
Rozin and Magnusson, ref. 5 above.
Webster, F. E., Jr and Wind, Y. (1972a) ‘A
general model for understanding
organizational buying behavior’, Journal of
Marketing, Vol. 36, April, pp. 12–19;
Webster, F. E., Jr and Wind, Y. (1972b)
(9)
(10)
(11)
(12)
‘Organizational Buying Behavior’,
Prentice-Hall, Englewood Cliffs, NJ; Ward,
S. and Webster, F. E., Jr (1991)
‘Organizational buying behavior’, in
Robertson, T. S. and Kassarjian, H. H.,
‘Handbook of Consumer Behavior’,
Prentice-Hall, Upper Saddle River, NJ, pp.
419–458.
Mudambi, S. M. (2002) ‘Branding
importance in business-to-business markets:
Three buyer clusters’, Industrial Marketing
Management, Vol. 31, No. 6, September,
pp. 525–533.
Webster and Wind (1972a and b) ref. 8
above; Bonoma, T. V. (1982) ‘Major sales:
Who really does the buying?’, Harvard
Business Review, Vol. 60, May–June, pp.
111–119.
Rackham, N. and DeVincentis, J. R. (1992)
‘Rethinking the Sales Force: Redefining
Selling to Create and Capture Customer
Value’, McGraw-Hill, New York, NY;
Webster, F. E., Jr (1999) ‘The changing role
of marketing in the corporation’, Journal of
Marketing, Vol. 56, October, pp. 1–17.
Mitchell, P., King, J. and Reast, J. (2001)
‘Brand values related to industrial products’,
Industrial Marketing Management, Vol. 30,
No. 5, pp. 415–425.
䉷 HENRY STEWART PUBLICATIONS 1350-231X BRAND MANAGEMENT VOL. 11, NO. 5, 388–402 MAY 2004