Academic Research學術研究連載
走進中國工業品牌管理與競爭的新常態
Entering into the “IB and HB branding management Era”
by Dr. Yang XiaoTong
Edited by Eric and authorized for release
OVERVIEW -001
In this part, we will give you a full picture of brand marketing in various angles including
2.1 Research Works Done on Brand Theory
With much effort already made to research and development of brand-related marketing theories, it is now widely accepted in consumer market that brand management acts as a core capability that determines whether or not an individual company will succeed in surviving fierce competition. However, in contrary to that is the industrial market where far less research has been done on the impact imposed by Branding Strategy (Martinez & De Chernatony, 2004; Mudambi, 2002). Under the subject of this study, we will go further with more discussions on the relevant theories that involves branding, co-branding, ingredient branding and brand trust etc.
2.1.1 How the Concept of Brand Evolves
In B2C domains, brand marketing and associated management strategies are the subjects that many scholars have done research works on. Brand is defined by Kotler as a unique name, term, sign, mark, design or a combination of these, that are used to identify the product or service sold by a certain seller on the market, and more importantly to distinguish it from its rivals (Kotler, 1991 at P442). Nowadays, brands as one form of intangible assets are having more public acceptance by many company executives and scholars. It is in B2C domains that more detailed works have been done on this subject (Aaker, Keller, Simon & Sullivan, Rust, Zeithamal, Lemon, Cronin, Brady, Thomas, Hult, Ailawadi, Lehmann, Neslin et al). It is also revealed in a paper that the market-to-book ratio of companies listed in Fortune 500 is close to 3.5, which indicates that their market valuations are inclusive of intangible assets (Capraro & Srivastava, 1997). As a result of that, some scholars tend to make brand conceptualized as primary market assets and shareholder values (Srivastava, Shervani & Fahey, 1998). The purpose of it is to give advice on how to take advantage of this valuable market leverage in practice. In most cases, procurement process in B2B industrial market is far more complicated than that in B2C consumer market, as a result of which marketing activities are often focused on those who are in charge of procurement or equally who authorize it. One of the key roles brand play in business world is to reduce any uncertainties or risks that are involved in B2B markets, and also to increase customer perceived value. Therefore, brand is often believed to signify the benefits customer will have from reduced risk of purchasing decision and increased satisfaction level (Mudambi, Doyle & Wong in 1997).
2.1.2 Theories Relating to Brand
Brand equity is actually not a newly-raised phrase that had been a subject of research by numerous scholars ever since mid 1980’s (Aaker and Biel, 1992; Leuthesser, 1998; Maltz, 1991), while a consensus is still yet to be reached on how to define it. The first one to raise the concept of brand equity is Farquhar, who considered it as an added value to the products or services a particular brand name represents. According to the definition by Aaker and Joachimsthaler in 2000 (See page 31), brand equity is described as a series of assets or debts that are closely associated closely with brand, brand name and its logo etc. It is found to be influential in either increasing or reducing the value customer can perceive from the products or services offered by a particular company. Furthermore, brand equity is also believed to include brand loyalty, brand awareness, perceived quality and brand association, which is illustrated below.
Originally, study on brand equity was limited to B2C market alone as it was first done by some scholars from consumers’ perspective (Keller, 1993; Schocker, Srivastava & Rueckert, 1994). In the year 1993, Keller put forward the concept of CBBE, Customer-Based-Brand-Equity, which is powerful to create differential effect that brand knowledge has on customer response to the marketing of that brand. Brand knowledge in Keller’s view consists of two parts, brand awareness and brand image. From below the chart, you will see how it is structured.
Keller put the value brand brings to the company owning it and its distributors down to the fact that brand is something valuable to the customers it targets. Therefore, positive customer response as well as positive customer-based brand equity can translate into higher sales volume, reduced costing and larger profit margins as an eventual goal (Keller, 1998, see P8). Higher brand awareness and positive brand image can increase the chance of potential customers choosing it, which will lead to stronger inclination of buying, increased customer loyalty and more immunity from the marketing efforts by its competitors.
As brand is produced by people rather than something native, brand value chain was introduced by Keller and Lehmann in 2003 to give you full understanding of how brand management is developed.
Despite less study ever made on the effects brand has on B2B market, Van Riel, De Mortanges and Streukens still did an empirical study based findings that industrial companies like those on B2C market are also benefiting from their investment in brand equities. As far as industrial produces is concerned, well-known brand can bring higher premium to the company it represents (Bendixen, Bukasa & Abratt, 2004), although it has to be recognized some non-brand elements like pricing and lead time are more significant in affecting buying decisions to be made. According to a survey in 2002, Mudambi comes to a conclusion that, brand marketing plays a much more crucial role than expected in determining how buying decision is going to be taken in B2B market. It has been suggested in a study by Michell King, Reast in 2001 that in B2B market, marketing of branded products will bring more differentiated competitive advantages than that of non-branded products.
A judgment can be made from what we have discussed so far that brand, is a critical element for an individual company to make success of its business throughout its course of development. To achieve that goal, a fundamental mechanism must be in place to ensure a long-term competitive advantage is maintained for a better financial return by identifying the resources a company and by implementing proper branding strategy.
Nowadays, branding strategy has been widely applied to both B2C and B2B markets, as a result of which Co-Branding strategy develops rapidly to where it is now. As cooperation among different brands becomes increasingly common, various forms of Co-Branding strategy, like brand alliance, joint marketing and joint promotional activities, are getting more and more familiar to the public. In this course, study on Co-Branding is also in constant development.
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For contact with the author, please email to shanshan@towermind.com;
For contact with the editor, please email to yangls@skiplifting.com
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