Brands and Brand Equity
B2B purchases are based on performance and differentiation from the competition. The challenge is to create and amplify differentiation so that your brand is preferred over competitor brands. According to a new marketing report from The CMO Survey from the Fuqua School of Business, 30% of those surveyed have not experienced changes to their marketing budgets, while 41% reported gains and 28% reported cuts. In general, marketers reported a 5% increase in budgets during the pandemic, and they expect digital spending to grow by 4% over the next year. For both B2C and B2B companies, the top priorities of marketers right now are building brand value and customer retention. B2B brand building matters because the brand matters.
What is a brand? A brand is an identifier that differentiates products or services from competitors’ products or services. Branding is a psychological construct. It’s a buyer’s perception based on brand awareness, perceived quality, the value the brand offers, and the image of the brand. The image of the brand is most potently defined as its differentiation from the competition.
What is brand equity? To the B2B consumer, it’s an image not specifically explained by product features or attributes. To the marketer of the product, brand equity is the economic value a branded product brings to a company, compared to the value a comparable unbranded product offers.
How B2B Consumers Differ from B2C Consumers:
- Brand equity in B2B markets is more important because of the complexity of the purchase process. This complexity includes the number of people involved in the purchase decision process, the length of time from inquiry to purchase, and the internal hurdles involved, such as the compatibility and cost of conversion from the current brand.
- There is an element of risk in B2B purchases, both to the buyer and the company. To mitigate risk, companies tend to purchase recognized brands over unknown brands.
- Industrial purchasers in B2B situations consider the product brand and the company brand in the same context. They look at the reputation of the company brand as the reference for support, quality, and value. Buyer-supplier relationships run deeper in the B2B world.
- B2C purchasers focus more on product attributes like appearance, color, and features. B2B purchasers will focus on performance, value, quality, and reputation.
Do Brands Still Matter?
B2C purchases are driven by desire, need (or both). B2B purchases are driven by absolute need.
A brand represents the promise of quality, and quality (for the most part) is equal among consumer brands. In fact, products aren’t replaced anymore because they fail —; they’re replaced because they become technologically obsolete.
Brands now have more impact in the B2B market because brand loyalty in B2C appears to be diminishing due to generational shifts in expectations, lifestyle changes, and consumption-pattern changes.
Consolidation is also a factor. Brands have consolidated in B2B as well as B2C, primarily due to mergers, acquisitions, and consolidations. The vanquished have lost their identity, and many brand choices have been eliminated. It becomes a challenge for the marketer to manage brand identity during these brand transitions.
7 Considerations for Brand Optimization
- Understand your target customers’ purchasing process. Develop a value proposition that emphasizes brand-value and builds your brand image — such as service, support, and company reputation.
- Build your brand, nurture it, enhance it. Demand respect from all who utter its name or gaze upon its logo. Make your brand unique through what it represents. It’s the essence of your business.
- Consider the value proposition of your product(s), and ensure that your brand aligns with it. Position your product brands to align with the character of the corporate brand.
- Company brands should align with the mission and values of the company. Product brands should align with the product family, highlighting the capabilities of the product(s).
- To build the strength of a brand, manage the number of products and derivative brands.
An example of this could be a product called “Hero,” and its derivatives might be: Hero-Pro, Hero-Max, Hero-Ultra, or some combination of prefixes and suffixes.
- Review your brand marketing. Visuals and messaging should support your brand, including the logo, colors, fonts, and tagline.
Marketing campaigns are developed for two reasons: awareness/brand building, or lead generation. It’s critical in the initial stages of development that the intent is clear and the campaign tactics align with the goal.
- Brand management is a science. As a company grows through acquisition, it absorbs products and brands and typically phases out legacy brands over a defined time period. This process requires a thoughtful shift.
Create a Transition Plan
Transition can be difficult. Branding is emotional, and employees (especially salespeople), take tremendous pride in their brand of products, even as it’s being erased. It’s important to have a transition plan and follow it so emotions don’t get in the way.
If you need help with a brand strategy, contact us for a 30-minute consultation.