Branding in the Industrial Markets:Why We Care, How We Put It to Work

February 22, 2011

Shari L.S. WorthingtonTelesian Technology

Branding Adds Value

• Branding makes the buying decision process easier

• Helps reduce the risk of buying the wrong product

• Adds value to a company’s intangible assets• Can create price premiums• Branding is a distinct form of

DIFFERENTIATION– Do you sell commodities or solutions?

Brand Value of Top 10

65.3

33.7

29.4

23.6

58.7

32.1

29.2

$ B

% of B2C sales % of B2B salesLegend: Source: Interbrand 2008

Coca

Cola

Micro-

soft

57.1

IBM

51.6

GE Mac-Donald’s

Nokia Toyota

30.9

Intel MercedesBenz

Disney

Brand Functions

• Increased information efficiency– Branded products have recognition value

• Risk reduction– Ensure and legitimize buying decisions, since buyers

often have a penchant for avoiding risk

• Value-added or image benefit creation– Brand is the shorthand value image of the company

• The more recognized a brand among members of the buying team, the more likely that the “hurdles” for approval will be lessened

Role of B2B Brands

Differentiate

Increase Sales

Differentiate Marketing

Create Preferences

BrandRisk Reduction

Information Efficiency

Value Added

Secure Future Business

Create Brand Loyalty

Command Price

Premium

Create Brand Image

Branding Triangle: Consistency Required

Company

Collaborators Customers

General Public

Branding Checklist: Brand Identity

• Are you conveying a consistent brand identity to your target audience? (logo, colors, designs etc)

• Does your brand identity accurately reflect the company/product’s key attributes?

• Does your staff understand what your brand stands for and their role in delivering on your brand promise?

• Do you always deliver on your brand promise? • Is your brand identity protected – do you have

a set of guidelines on how the various brand elements should be used?

Branding Checklist: Brand Awareness

• Is your brand easily recognized by your target audiences?

• Is your brand top of mind when your target audiences consider purchasing?

• Does your brand feature on all relevant marketing material?

• Competitive position/market awareness– Do you understand your brand positioning in the

marketplace? – Do you have a competitive edge in the marketplace? – Are you aware of potential opportunities in the market?

Branding Checklist: Competitive Positioning

• Do you understand your positioning in the marketplace?

• Does your brand have differentiating benefits associated with it in customers’ minds?

• Do your intended customers believe your intended positioning in the marketplace?

Branding Checklist: Process

• Is your organizational structure, operations and culture aligned with your brand values?

• Do you review your brand and what it stands for each year?

• Do you have systems in place to continually monitor your brand internally and externally

Brands Are One of the Few Opportunities to Differentiate

• In a world where product offerings are getting more similar, brands can make a difference– Greater willingness to try products & services– Less time needed to close the sale after offering– Greater likelihood that a product is purchased– Willingness to pay a price premium– Less sensitivity to prices increases

Rockwell Automation

SoftPLCControl Technology Corp.

National Instruments

Publications

Technical Support

Trade shows/ Presentations

Web Site/ Web Banners

BrandProducts and

Services

Networking

Word of Mouth

Proposals

Customer Care

Innovation, R&D

Packaging

Business cards

Training

Service & Delivery

Sales Collateral

Pre-SelectionOngoing

Relationship & Referral

Purchase & Usage Experience

Publicity PR/Advertising

Sales Representative

Product Performance

Consistency Across Brand-Customer Relationship

CAT Footwear

Visual Identity Guidelines

• Available and usable across all intended markets, such as URL

• Meaningful: capture essence of brand• Memorable: distinctive, easy to

remember• Protectable• Future oriented: position for growth,

change, success• Positive associations• Transferrable: new products, new

markets

Competing Through Branding: Buying Behavior

• A recognized brand name with positive customer perception has advantage at all stages of decision making– Determine that a need exists– Determine product specifications– Acquire solution providers– Cull the bids/proposals to a short list– Evaluate the short list, or get revised proposals/bids

Competing Through Branding: Buying Behavior

• “A recognized brand name with positive customer perception has advantage at all stages of decision making”– Cut the short list to finalists– Presentations– Final evaluation and choice– Post purchase relationship

Defend Market Position

• There will be imitators, so…– Market up — build relationships with management

above the influencers to reinforce the decision process

– Market down – build relationships with the lower level users of the product or service

– Market sideways – build relationships in other parts of the organization to facilitate translation of the current or future products within the customer organization

• Whenever there is any doubt, the customer is likely to use what they are already familiar with

InBranding: Ingredient Branding

• An essential ingredient or component of a product has it’s own brand identity

• Most B2B companies are single-stage marketers– Marketing efforts directed to next stage in value

chain, their customers

• Multistage branding is directed at two or more downstream stages of the value channel

Ingredient Branding

• Goal is to create customer demand for the ingredient at the retail level so consumers “pull” the product through the distribution channel– Forces middle stages to use the ingredient

• “Ingredient” should capture an essential part of the end product– Intel processors are the “heart” of the PC

Push & Pull Branding

Ingredient-Producer

Final ProductProducer OEM

Final User

Sales-promotion to theB2B Customer

SupplySupply-push

Incentives todemand creation

at the B2B customer

Supply-push

Incentives fordemand creation

at the final customer

Supply

Push

Sales-promoting from theIngredient supplier to the

final customer

Demand pull

Incentives for the demand creation of a certain ingredient in the final product

Demand

Demand

Pull

Questions?

Shari Worthington

Juliann Grant

Phone: 508-755-5242

sharilee@telesian.com

julianng@telesian.com

Blog: http://blog.telesian.com

LinkedIn: http://www.linkedin.com/in/sharilee

Thank you!!