KEY ISSUES IN B2B MARKETING AND A NEED TO DEVELOP APPROPRIATE THEORIES AND MODELS

Muhammad Sajid SaeedGlasgow Caledonian Business School

Glasgow Caledonian University, Scotland – UK

ABSTRACT

B2B marketing is an ongoing debate since 1990s but the researcher’s community is unable to

agree on any convincing B2B branding model because of lack of strong empirical support.

This paper aims to fuel the discussion on examining B2B marketing research by discussing

various key issues that are currently being debated in the literature. The study also

investigates the importance of brand management in developing relationships between

manufacturers and resellers. Findings of the paper suggest that organizational buyers and

other marketing professional now recognise the importance of B2B branding but they are

often afraid to adopt incomplete theories and models with narrow and myopic vision. The

future research in B2B branding context should be based on the phenomenon that validates

the importance of developing meaningful theories and models with strong branding concepts.

Keywords: B2B Marketing, B2B branding, Key issues B2B branding, Manufacturer and reseller relationship B2B context, Benefits B2B branding.

CITATION:

Saeed, M. S. (2011), “Key issues in B2B marketing and a need to develop appropriate theories and models” Interdisciplinary Journal of Contemporary Research in Business, ISSN 2073-7122, IJCRB July Edition 2011-IJCRB Vol. 3, No. 3.

1- INTRODUCTION

B2B marketing is different breed in terms of targeting an intelligent customer who is

sophisticated and does not do impulse purchase. Over the past two decades, B2B marketing

has emerged as a discipline in the marketing literature but unfortunately it has never received

much attention of researcher’s community because of misconceptions about B2B concepts.

As a B2B marketer, one is likely to face tremendous challenges such as improving lead

quality, managing complex sales, and meeting the requirements of customers and sales team.

B2B marketing can be defined as:

“The practice of individuals or organizations, including commercial businesses,

Government institutions, facilitating the sale and resell of their products/ services to

other organizations/institutions”

B2B branding is the most popular issue in the current literature where marketers have

explored the significance of branding in B2B context. According to Kotler and Pfoertsch

(2006) branding is just as relevant to B2B as in B2C. In addition, branding is helpful to

increase customer’s loyalty, reduce buying risks, add value for customers and conveys

complex information about products and services. B2B brand relevance can be judged from

the vivid examples of Microsoft, IBM, Dell, Cisco, HP, Intel, Siemens, Coca-Cola, FedEx,

and General Electrics.

The purpose of this paper is threefold. In the literature review section, a critical reflection on

the key B2B issues will be discussed that are currently being debated in the literature. Second

section consists of how key aspects of marketing theory in B2B context are likely to evolve

over the next few years. Finally, the last section focuses on managing B2B brands from

manufacturers and reseller’s point of view.

2- LITERATURE REVIEW

Business-to-business marketing is about meeting the requirements of other businesses. Since

1990s, many B2B related models and theories have been developed and evaluated but still

there are various criticisms of work in this field have arisen. Ford (1998) identifies two major

reasons of concerning issues in B2B marketing; (1) lack of defining significant problems

associated with validation of B2B terms and methodology; (2) organizational internal and

external operations are not linked with each other, so, there is a lack of investigation in

finding out, what is happening in the business environment and how the relationships are

changing.

One of the major issues in B2B marketing is that B2B markets have a more complex decision

making unit as compared to B2C markets (Harrison et al., 2006). Industrial markets are

different from consumer markets not only because of its products but also in terms of

purchase decision making process. In purchasing matrix high risk products such as materials

and plant machinery are normally purchased by top-management; and middle & lower level

managements are responsible in buying low risk products such as office insurance and

stationary. The Figure 1 shows the purchasing decision matrix of industrial products.

Figure (1) – The Risk-Value Purchasing Decision Matrix

Source: Harrison et al. (2006)

In B2B markets, the buying process is often more complex as compare to B2C markets

because of purchasing risky products, B2B buyer needs to be more rational and should have

comprehensive knowledge about products and markets.

Another problem associated with B2B marketing is that B2B products are more complex and

a B2B marketer needs to have full knowledge and technical expertise in providing technical

details to the customers at the time of sale (Harrison et al., 2006) and the success of whole

product line greatly depends on sales team in B2B context. In addition, in business-to-

business markets, companies buy limited number of buying units by following Pareto

Principle or 80:20 rules, so it is necessary for the B2B marketers to emphasise on establishing

long term relationships with buyers especially in emerging markets such as China, India and

Russia.

From the past two decades, the most complex issue concerned with B2B marketing is B2B

branding that has received little attention of the researcher’s community. The main reason of

receiving comparatively little attention in the academic literature is that industrial buyers are

not affected by emotional values corresponding to the brands. Some experts (Bendixen,

Bukasa and Abratt, 2004; Low and Blois, 2002) believe that branding plays no role in B2B

marketing because of impracticality of B2B branding. In contrast, few practitioners (Cretu

and Brodie, 2007; Michell, King, and Reast, 2001) give importance to B2B branding because

of its positive impact on perceived quality of product or service such as product’s identity,

consistent image, and conferring uniqueness.

The major misconception about branding is that it is only applicable on consumer products

and has no effects on B2B marketing. In reality, B2B branding is a different concept for

industries in terms of their complex products, buyer’s preferences, and personal relationships.

According to Bengtsson and Servais (2005) many things are common in B2B and B2C

branding but there are also dissimilarities which exist specifically in relation to their purchase

processes. Linder et al. (2007) highlights some importance differences between B2C and B2B

branding as shown in the Table 1.

Table (1) – The differences between B2B and B2C markets

B2B BRANDING B2C BRANDING

Aimed at intermediate value provider Aimed at the end-user

Two way relationship Transaction or One way relationship

Small number of customers Large number of customers

Buyers reached through specialized media Buyers reached through mass media

Multi-step buying cycles Short sales cycles

Relatively complex product offering Relatively simple product offering

Never on impulse Purchase can be an impulse

Marketing is about educating Marketing about convincing

Source: Linder et al. (2007)

Another misconception about branding is identified by Kotler and Pfoertsch (2007) that

branding is not just selecting a logo or name for the organization because changing the name

or logo has no worth if there is a lack of underlying purpose. One possible reason for such

misconception could be the misunderstanding of branding concept. Kotler and Pfoertsch

(2007) defined B2B brand as:

“A set of attributes, benefits, beliefs, and values that differentiate the products and

services, moderate and simplify the complicated decision making processes.”

There are few other factors involved in reluctance to brand such as lack of academic research

and impracticality of B2B branding. The fact is that plenty of research has already been done

on B2C branding but, unfortunately, there is not much variety of research available in B2B

context (Lynch et al., 2004; Ohnemus, 2009). According to Ohnemus (2009) B2B branding

has doubtful theoretical groundwork and this is the reason that companies do not take chances

to rely on this uncertain information in order to implement B2B branding. On the other hand,

Bendixen et al. (2004) specify that B2B branding is impractical because companies have

hundreds of products and it is not beneficial for the companies to brand each and every item

in their wide product range. Moreover, Bendixen et al. (2004) and Balmer (2001) suggests

that it could be less costly for the companies to promote all of its products using one brand

name as the company name to avoid financial problems.

From the past few years, the importance of industrial branding has increased but still there is

no comprehensive business model for B2B branding that exists (Kuhn et al. 2006). Branding

itself is a wide topic that contains brand vision, brand identity, brand awareness, brand image,

brand loyalty, brand building, brand maintenance and brand equity. Brand names, logos and

slogans are normally associated with brand identity and awareness. Brand loyalty is measured

in terms of how customer is inclined to choose the same brand when buying from the product

class. Similarly, brand image is strongest when it is highly associated with the ways to

produce global impression in the eyes of customers.

B2B Brand building is a complex process that includes advertisement, website, brochures,

and trade show booths in order to deliver consistent image of company’s product or service.

It is essential for the entire organization to understand the importance of branding in B2B

context and also able to articulate a consistent branding message. According to Jobber (2007)

there are 7 factors which have influence on the success of building brands as illustrated in

Figure 2.

Dalglish (n.d) from circle research suggests five steps in building strong B2B brands; (1)

assess the competition (2) audit your own promise (3) determine the ideal and assess the gap

between vision and reality (4) live the brand (5) measure and respond. Although this model is

not internationally recognised but it seems like an excellent guide for building an insight led

brand.

Figure (2) – Factor influence in building successful brands

Source: Jobber (2007)

Brand equity has been popular topic among researcher’s community from more than a

decade. Different definitions of brand equity exists in marketing and management literature;

for instance, Aaker (1991) defined brand equity as

“The set of brand assets and liabilities linked to a brand, its name and symbol that

add to or subtract from the value provided by a product or service to a firm and/or to

the firm’s customers.”

Several experts and practitioners have contributed to the branding theory but nobody can

deny the work of Keller (1993) who introduced the concept of customer-based brand equity

and brand hierarchy. The Keller’s (1993) framework provides guidance in building,

measuring and managing the brand equity. Kaller’s (1993) customer-based brand equity

pyramid is shown in Figure 3.

Figure (3) – Keller’s Customer Based Brand Equity Pyramid

Source: Keller (1993)

In relation to B2B branding, Kuhn et al. (2006) made an excellent contribution to the B2B

theory by replacing emotion-driven factors with relational counterparts in revising customer-

based brand equity pyramid. According to Kuhn et al. (2006) salience is important but it

deals with manufacturer’s brand instead of organizational brand. Similarly, Performance

describes the intrinsic values of the brand and on the other hand reputation is the sum of

extrinsic properties related to the brand. The research of Kuhn et al. (2006) is based on the

importance of user profiles, purchase and usage situations and credibility in B2B context.

Lastly, in the suggested replaced pyramid, resonance is replaced by partnership solutions in

order to develop the impact of human element in industrial branding. The revised version of

customer-based brand equity pyramid for B2B is shown in the Figure 4.

Figure (4) – Revised CBBE Pyramid for B2B (based on Keller, 1993)

B2C Context B2B Context

Source: Kuhn (2006)

In B2B context, the brand equity is the result of consumer’s perception which is influenced

by many factors such as country of origin, quality, price, technical services, ordering and

delivery services, customer experience management, and the presence of internet and its

impact on branding (Yasin et al., 2007).

3- DISCUSSION AND FINDINGS

From past couple of decades, the purchasing powers of resellers have been increased that

results in the reduction of leverage of the manufacturer’s brand with resellers (Bloom and

Perry, 2001). The importance of manufacturer’s brand for resellers has been ignored because

of the misconception that branding is all about B2C products and has no effects on B2B

marketing. In this section of the paper, the focus will be on the application of key issues

regarding B2B branding by providing insights of resellers and manufacturers.

Industrial and reseller purchases are similar in terms of purchasing policy of the organizations

but there are also some important differences. For instance, from industrial point of view,

brand purchase is the part of the organizational production process but, on the other hand,

reseller purchases deals with the requirement of end users. In addition, brand purchase also

affects the competitive advantage, market and financial performance of reseller’s

organizations (Buchanan, 1992). Another difference is that manufacturers have the ability to

use marketing tools through resellers and for this purpose the relationship between

manufacturer and reseller is very important because a poorly managed relationship between

them can weaken the value of manufacturer’s brand.

In order to develop manufacturer and reseller relationships, it is important that manufacturers

should focus on managing their brands effectively in B2B context. According to Kotler and

Pfoertsch (2006):

“Brand management is the organizational framework that systematically manages the

planning, development implementation, and evaluation of the brand strategy.”

Kotler and Pfoertsch (2006) emphasize the importance of making a consistent impression of

the brand by using advertising media in order to manage B2B brands. Taking into

consideration, an effective brand promise needs to be defined clearly, relevantly and

meaningfully. To assure the consistent image, organizations need to adapt holistic branding

approach where customers have faith in the company and the brand. The Figure 5 shows the

brand customer relationship to maintain a consistent image in the minds of the customers:

Figure (5) – The brand customer relationship

Source: Kotler and Pfoertsh (2006)

Another important technique to manage B2B brands is to develop brand architecture where

an organization applies distinctive brand elements on various products and services. The

brand architecture is the hierarchical spectrum of possible relationships between brands and

other factors that manufacturer can use to manage the brands. The brand relationship

spectrum is shown in the Figure 6.

Figure (6) – Brand Relationship Spectrum

Source: Kotler and Pfoertsh (2006)

In these days, social branding is also playing a vital role in managing B2B brands. Today,

companies use famous words such as “corporate citizenship” and “Corporate Social

Responsibility (CSR)” for signifying ethical and social marketing (Kotler and Pfoertsch,

2006). One of the best examples of social responsible marketing in B2B context is the

partnership of British Airways and United Children’s Fund (UNICEF). Their mutual

campaign is called ‘Change for Good’ where passengers are encouraged to donate spare

change to UNICEF as charity.

In building and managing B2B brands properly word-of-mouth marketing can have

tremendous power. Nowadays, many social networks are allowing people and companies to

share their ideas and views on the platforms such as Linkedin, Facebook and Twitter and

other social websites. These social platforms are playing major role in promoting brands

where individuals and companies can build a community to make the difference.

While research is now recognising the importance of B2B branding but still the question is

holding the ground that what are the financial and non-financial benefits for manufacturers

to brand their products in B2B context? According to Brodie et al. (2007) the main financial

benefit of B2B branding for both manufacturer and resellers is the healthy margin of profit in

relation to the increment of the sales volume. Similarly, Low et al. (2002) and Ohnemus

(2009) identify that a strong brand will be in demand and will allow the companies to charge

premium price. In contrast, as non-financial benefit, Cretu et al. (2007) found that branding

has positive impact on the perceived quality of the product or service. Furthermore, a strong

brand may increase company’s power in the distribution network and open up new

opportunities for licensing (Low et al., 2002 and Ohnemus, 2009). From manufacturer and

reseller’s point of view, brands are helpful in reducing perceived risk and uncertainty in the

buying situations.

In communicating the brands, FedEx is one the best example where all communication is

based on maintaining the reputation and building the brand image of the company. The CEO,

Fredrick W. Smith is responsible in making major branding decisions and the campaign is

targeted in providing services to the organizations of different sizes. As a brand management

strategy, FedEx give priority to maintain consistent image in the minds of people in order to

sustain its position in the top ranking of B2B brands.

4- NEED FOR FUTURE RESEARCH

The current study is based on exploring key issues in B2B marketing that has been discussed

by researcher’s community. There are many problems associated with B2B marketing as

discussed earlier in this paper. The literature study suggests that B2B branding is one of the

controversial areas in marketing where academic researchers are unable to develop an

adequate theory and majority of B2B branding still adopts a narrow and myopic view of the

brand. B2B branding is huge subject area where an extensive research still needs to be done

in order to provide marketing academies and practitioners with a more comprehensive

understanding of the issues.

First of all, some basic queries still need to be answered; for instance, ‘is branding suitable

for all B2B brands?’ and if it is suitable then ‘what are the barriers to brand B2B

organizations’. Although the work of Michell, King, & Reast (2001); Kotler & Pfoertsch

(2007); and Cretu & Brodie (2007) has played a significant role in answering these questions

but still there is no universally acceptable model or theory has been presented. In order to

address the requirements of future research on B2B branding, researchers need to agree on an

appropriate definition of the brand.

Secondly, there is a need to investigate brand equity in terms of its importance in the buying

situation that under what circumstances is the brand more/less important and what are the

components of industrial brand equity?’ In this regards, the work of Keller (1993) and Kuhn,

Alpertf & Pope (2006) is really appreciated where they presented Customer-Based Brand

Equity pyramids in C2B and B2B contexts. Similarly, Aaker (1991) suggests that brand

equity is associated with brand image, brand loyalty, brand awareness, perceived quality and

other brand assets. On the basis of these arguments it can be said that brand equity acts as the

backbone of B2B brand relationships.

Many organizations such as IBM, Cisco, Oracle, and Intel have already built successful brand

equities in order to extend the brand’s goodwill in both B2C and B2B contexts. The future

research may also be directed in the development of individual and corporate product brand

identity in B2B context. Taking into consideration, research could also address the current

trends of buying that implies a general change for suppliers and subcontractors in terms of

marketing offer, position, communication, and brand management (Axelsson and Blomback,

2007).

5- CONCLUSION

Today, there are number of conflicting theoretical models existing for the explanation of B2B

marketing and B2B branding phenomenon. However, most of them are lacking strong

empirical support. The incomplete nature of these theories and models precludes more

confusion and disorder. Looking at the recent evidences available, organizations and

professionals now recognise the importance of B2B branding but an extensive research still

needs to be done in this topic area in order to provide marketing academies and practitioners

with more comprehensive understanding of the issues.

The paper presents the literature review on key issues of B2B marketing and identifying an

agenda for future research. The review of the relevant literature has suggested that the

academic inquiry on B2B marketing and B2B branding is limited, disperseed, and

inconclusive. In general, the branding literature has multifaceted perspective of the brand and

majority of B2B branding research is still holding narrow and myopic views of the brand. In

order to provide conceptual framework of B2B branding, it is essential for the researcher

community to collect and analyse vast amount of non-academic content available.

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