B2B Brand Management
Philip Kotler
Waldemar Pföertsch
December 2006
B2B Branding A Must Read...But Tough Love For Marketers
Philip Kotler, one of the titans
of modern marketing and Waldemar
Pfoertsch, a Professor for International
Business at the Pforzheim University in
Germany have collaborated on a
new book that is destined to become a
classic. B2B Branding covers a lot of
territory and has some great case
histories.
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Branding is an established
marketing tool in consumer industries
 In Business-to-Business branding is just in the
initial stage.
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Marketing Advantages of Strong Brands
 Improved perceptions of
product performance
 Greater loyalty
 Less vulnerable to
competition
 Less vulnerable to crises
 Larger margins
 Inelastic consumer
response to price
increases
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 Elastic consumer
response to price
decreases
 Greater trade
cooperation
 Increase in effectiveness
of Integrated Marketing
Communication
 Licensing opportunities
 Brand extension
opportunities
Chapter 4
Acceleration Through Branding
Guiding Principle
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Creating Value
.. with branding requires a long term view, and
need other measurements
 Measuring profit performance using ROI (return
on investment) has two problems:
 First, profits are arbitrarily measured and subject to
manipulation; cash flow is more important.
 Second, investments ignore the real value of the firm,
and brands as one of the main value drivers.
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Value Measurement
A company’s real value resides more in its
intangible marketing assets:
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brands,
market knowledge,
customer relationships,
distribution coverage,
intellectual property,
and partner relationships,
as in its balance sheet.
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Brand Value Measurement
 These assets are the drivers of long-term profits and they
have to demonstrate their impact on shareholder value
with brand typically being the most important one
of them.
 A value-based performance measure of a company's
worth to shareholders. The basic calculation is net
operating profit after tax (NOPAT) minus the cost
of capital from the issuance of debt and equity,
based on the company's weighted average cost of capital:
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The power of branding
As J. Justus Schneider, Brand manager of MercedesBenz admits,
“The brand Mercedes-Benz is a brand icon,
from its founding day till today.”
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Brand Building Process
 Brand building approach incorporates all the
relevant processes necessary for building a
brand icon.
 Branding initiative comes from top
management – the Owner, CEO, CMO or CBO
 and aims to establish the
 brand strength, including
 brand stability,
 brand leadership and international presence.
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The 10 most brand authentic brands
Interbrand 2006
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Sequence of the brand building processes
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Branding Principles
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Consistency
Clarity
Continuity
Visibility
Authenticity
Brand Planning
Based on the principles of continuity and involvement
 Build a climate of ongoing change
 Have processes that deliver timely information
 Develop procedures for rapid breakthrough
planning
 Have standard formats for communicating brand
plans and changes Have strong implementation
processes
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Brand Analysis
You have to answer the following questions:
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Who are you?
What is important to you?
What does your company stand for?
What is important to your customers?
What distinguishes you from competition?
Where and what do you want to be in five years?
You have to measure Brand share =
Brand Sales / Category Sales
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Brand Intelligence (BI)
 Key word searching (KWS)
 Natural Language Processing (NLP)
 Brand Score Card (BSC)
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On the Way to Brand Strategy
 Brand Mission
 Brand Value Proposition
 Brand Promise
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The Mercedes-Benz “Enduring Passion”
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Brand Positioning
Brand
Essence
Brand
Power
Corporate or Product Branding?
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Core Customer
Insight
Brand Strategy Thinking
 The power of a brand lies in the customer
mind set – brand equity is therefore a vital
strategic bridge
 They can be captured in the Customer-Based
Brand Equity (CBBE) Model
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Customer-Based Brand Equity (CBBE) Model
The CBBE model implies that a strong brand involves the
customer over four steps:
 (1) Deep Broad Brand Awareness, establishing a
proper identity and awareness for the brand,
 (2) Establishment of Points of Difference by creating
the appropriate brand meaning through strong,
favorable, and unique brand associations,
 (3) Positive Accessible Reactions, through eliciting
positive, accessible brand responses, and
 (4) Forging Brand Relationships with customers that
are characterized by intense, active loyalty.
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CBBE Model
Loyalty
Brand
Resonance
Positive Reactions
Customer
Judgments
Brand
Performance
Customer
Emotions
Brand
Imagery
Brand Salience
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Points of Difference
Brand Awareness
Customer Acceptance Cycle
Brand Strategy
Brand
Loyalty
Brand
Stretch
Brand
Power
Brand
Dominance
Creating the power of your brand
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Brand
Coverage
Brand Architecture
Example
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Brand Portfolio Management Rules
 Align the brand portfolio with the business
design.
 Consider building a brand pyramid.
 Grow winners and harvest losers.
 Play the cards you are dealt.
 Counter the tendency to make brand
decisions in a decentralized, ad hoc manner.
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Brand Portfolio Management
Example
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Brand Portfolio Management Options
 “Pooling” and “trading”;
 Branded partnerships;
 Strategic brand consolidation;
 Brand acquisition;
 New brand creation.
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Brand Building Pyramid
Loyalty
Positive Reactions
Points of Difference
Brand Awareness
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What about You and Me?
Brand
Resonance
Customer
Judgments
Brand
Performance
Customer
Emotions
Brand
Imagery
Brand Salience
What about You?
What Are You?
Who Are You?
Customer Acceptance Cycle
Brand Audit:
Assess Brand strength and weaknesses through
 Brand inventory (internal analysis)
 Brand exploratory (external analysis)
 Brand Equity Charter
 Brand Score Cards
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Brand profiler exemplified at a
Personal Brand
High
Low
Dimensions
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http://www.reachcc.com/360personalprofiler
Brand Exploratory
 An investigation of customers knowledge of the
brand, awareness, and the strength, favorability
and uniqueness of associations (category, use,
brand promise…).
 The research activity is directed to understanding
what customers think and feel about the brand
and its corresponding product category in order
to identify sources of brand equity.
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Brand
Equity
Charter
(Kevin Keller)
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Brand Score Cards
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Keller, Linxweiler
Brand Audit
 Compliance audit
1) collection of information that establishes how
the brand has been used in each country that
it is marketed in,
2) assessment of deviations from its established
position in the structure and reasons, and
3) evaluation of the brand's performance.
 Strategic audit (top down audit)
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Brand Audit Tools
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http://signaturestrategies.com/Branding/brand_audit/brand_audit.html
More Brand Audit tools
Brand
Identity
Elements
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http://www.brandlogic.com/
Re-evaluating Business Brands
Development of Dow Jones market capitalization
Market
capitalization
(index)
B2B brands with
above average brand
development
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0
18
0
16
0
14
0
12
0
10
0
80
Dow Jones
average
60
0
1995
1996
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1997
1998
1999
2000
2001
2002
2003
2004
2005
t
2001
2002
2003
2004
2005
Average development for B2B brands
(indexed; 2001 = 100)
Current Research based on Dow Development & Interbrand Brand Evaluator 2001-2005
t
Summary
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The brand building process consists of brand planning, brand analysis, brand
strategy, brand building and brand auditing.
Brand building starts with understanding the key attributes of your products
and services as well as understanding and anticipating the needs of your
customers.
Mastering brand stability, brand leadership and international presence
calls for a structured sequence of the brand building process. ,
The first thing you have to do when building your own brand is to articulate
a brand mission that reflects what you want to accomplish with it. Secondly
you have to add a coherent set of brand values and a brand identity. All the
visual elements of the brand, the brand name, logo, and slogan, should be
developed accordingly to create a unique visual identity that reflects what the
company stands for as well as its attitude and culture.
The power of a brand lies in the customer mind set – brand equity is
therefore a vital strategic bridge from the past to the future and a set of stored
values that consumers associate with a product/service. These associations
add value beyond the basic product functions due to past investments in
marketing the brand and they are captured in the Customer-Based Brand
Equity (CBBE) model.
Summary 2
 Brand analysis helps to define and formulate a proper brand mission,
personality and values. Aligning to the corporate vision and mission is
mandatory for devising effective and focused distinctive brand
elements for developing a brand strategy
 The “three C’s” of branding refer to the indispensable conditions that
precede successful branding. For the purpose of completeness we have
added a fourth and fifth branding principle: Consistency, Clarity ,
Constancy, Visibility, and Authenticity.
 A brand strategy should not be changed just for the sake of change.
Re-branding or brand rejuvenation efforts have to be carefully
evaluated in terms of necessity and success probabilities. Companies
with many unstructured and maybe even diluted brands need to
refocus their brand which is almost the same work as building a brand
from scratch.
 Brand strategy consists of developing a strong mission, positioning,
brand promise, and value proposition.
 Successful brands don’t just sell products; they communicate clear
values stretched across a number of products.
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Summary 3
 A key element of success is the framing of harmonious and consistent
brand architecture across countries and product lines, defining the
number of levels and brands at each level.
 Brand auditing is seeks to measure the strengths and weaknesses of a
brand and the brand portfolio. The Brand Score Card measures the
performance of your brand in relationship to customer priorities.
Based on internal and external analysis, compliance and strategic audits
should be conducted regularly. Other brand metrics could be
implemented such as business intelligence,, key word search or Natural
Language Processing.
 Fact-based insights, grounded in an understanding of both brand
equity and a brand's economic contribution to corporate profits,
form the foundations for a winning brand portfolio.
 Over time every brand needs re-evaluation, fine-tuning and rebranding.
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Contact
Prof. Dr. Waldemar A. Pförtsch
International Business
Pforzheim University
waldemar@pfoertsch.com
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