Industrial and B2B Branding—More directed, more focused.
Branding is largely considered a subject matter of business to consumer (b2c) markets rather than business to business (b2b) and industrial markets. Yet some of the most formidable brands that have seen the light of the day belong to the industrial sector. Several of the successful brands that come to mind when we think of industrial brands are ABB, Microsoft, Amazon, IBM, Apple, GE, FedEx, etc. Let us discuss specifically industrial branding in b2b context, its importance and key implications. The number of customers in b2b environment is limited sometimes with only a dozen of them accounting for more than half of sales turnover of the supplier company.
When a “product” is bought for further processing or for use in conducting a business, Philip Kotler, the marketing guru, calls the process as “ingredient branding.”Till date, the most successful industrial or ingredient branding has been “Intel Inside” campaign. The message has created such strong brand associations that people refuse to buy a computer until and unless it carries the Intel logo. Brand specialists calculate the percentage of brand equity that Intel processor adds to a brand of computer by comparing the price the consumer is willing to pay with or without the Intel logo. It is a classic case where the unseen component of a product becomes better known then the product itself.
Buying Centre and branding
In industrial marketing, the customer is highly aware and is oriented to make profits and there is no single person dictating the purchase decision. A collective decision is taken by a group of individuals by what is also called the “buying centre.” The activation of the “buying centre” requires a series of decision-making over a given period of time. The salient point here is that it is not an organization that makes a buying decision rather it is done by the individuals that comprise the company. Industrial buying is characterized by long-term cooperative buying relationships. According to SM Mudambi, the “buying centre” comprises:
a. Initiators (who start the buying process).
b. Users (who actually use the product).
c. Buyers (who commit the organization to spend money).
d. Deciders (who have the authority to choose amongst potential product offerings).
e. Influencers (who add information or constraints in buying process).
f. Gatekeepers (those who control the flow of information into the buying process).
These individuals are, in turn, motivated by their rewards and incentives as well as their departmental budgetary allocations. Industrial branding is done with more focused approach than what is required in business to consumer markets.
Supplier’s brand is central when decider’s take a decision in favour of a product. So much so decision makers are willing to pay a premium for strong brands because their lives become easier, primarily, by aggregation of information and risk reduction. Strong supplier brands may even aid companies in building their own reputation by this association. Brand awareness drives market performance. The relationship is stronger in markets with homogenous buying centres and products, greater buyer time pressures and a high degree of technological turbulence.
Industrial branding activity is also highly focused on internal branding of employees by connecting them in single thread. Efforts may include rewards and recognition like organizing special events commemorating success milestones, performance reviews, awards and rewards to brand champions, and cross-functional groups. Internal branding is the set of strategic processes that align and empower employees to deliver the appropriate customer experience in a consistent fashion. These processes include internal communications, brand training support, leadership practices, reward and recognition programs, and recruitment practices sustainability factors. Companies invest in employees; stimulate a culture of learning, alternative activities, track employee satisfaction.
Content marketing—they way forward
Content marketing has been successfully used in some cases of b2b and industrial marketing for relationship building and driving sales. Industrial and b2b content is highly useful and actionable. Newsletter and blogs of the supplier give cues and information to the customer with which they can solve their problems. The most valuable and enduring example of b2b content marketing put to use for industrial branding is “The Furrow”—the newsletter of tractor company John Deere launched in 1895. “The Furrow” doesn’t sell equipment or is a promotional literature rather its content is targeted at helping farmer (a business owner) solve their problems. It carries case studies of agricultural excellence. Today, “The Furrow” is read by 1.5 million readers in 40 countries and in 12 different languages.
Branding the Caterpillar and Tata way
Another classic case of industrial branding is of Caterpillar. Caterpillar or Cat makes robust and technically superior heavy equipment. The monster-like machinery would be last thing in the world to create an emotion value for the customer. But Cat is one of the most valuable brands in b2b environment worldwide. Cat focused their branding on 2Ps—planet and people. For environment conservation, they optimized resource usage, maximized recycling and minimized energy usage. These changes were introduced at Cat’s many facilities as well as dealerships. Even Cat’s equipments were worked upon to decrease their fuel consumption. Dealers offered product, financing, insurance, operator training, maintenance, and repair services. Under the head of “People,” Cat invested heavily in educating the children of the communities in the regions were Cat’s equipments were operational across the world. The company also trained individuals on machines to make them employable. In addition to that Cat also ensured safety of the operators, while operating its product. Cat developed enduring relationships with the distributors, buyers and end-users. Cat gear like jackets, caps, rugged shoes, parkas was provided to drivers so that they could develop an emotional connect with the company. Back home Tata has put in the same industrial branding practices to brand their steel, which has become a very valuable brand worldwide.
We find that industrial branding is a very long process compared to non-industrial and b2c sector. People’s branding is an integral component here. People include the employees, their families, and communities in which the companies operate. That’s the core reason why we see companies like Shell and BP plough in large chunks of their profits again into the system and to benefit the people around the regions where they drill or refine petroleum products. Definitely, industrial branding is a long process and requires a focused approach with measurable objectives.