RESEARCH & IDEAS
B2B Branding: Does it Work?
Published: November 28, 2007
Author: John Quelch
Does it make sense for B2B companies to
take a cue from consumer companies and invest
in brand awareness? Many B2B CEOs say no,
but HBS marketing professor John Quelch
disagrees in his latest blog entry. Key concepts
include:
• Most B2B marketers cannot economically
address thousands of small businesses using
the traditional direct sales force.
• If left unattended, individual managers will
each do their own ad hoc marketing.
• B2B marketers are realizing that developing
brand awareness among their customers'
customers can capture a larger share of
channel margins and build loyalty that can
protect them against lower-priced
competitors.
Editor's Note: Harvard Business School
professor John Quelch writes a blog on
marketing issues, called Marketing Know:
How, for Harvard Business Online. It is
reprinted on HBS Working Knowledge.
Many business-to-business (B2B) CEOs
view marketing as the domain of consumer
goods brands. They are wrong. Among
Interbrand's 10 most valuable global brands, we
find Microsoft, Intel, IBM, and GE. All
generate far more B2B revenues than sales to
end consumers.
An HBS research team recently conducted a
study of top B2B global brands. These brands
shared the following characteristics:
• The CEO is a willing brand cheerleader,
loves the brand heritage, and is a great
storyteller. The CMO sees his or her
purpose as helping the CEO achieve this
role.
• The CEO understands that building brand
reputation reduces commercial risk,
COPYRIGHT 2007 PRESIDENT AND FELLOWS OF HARVARD COLLEGE
insulates the company in a crisis, and
provides the common purpose that can bond
all the company's stakeholders.
• Efforts are focused on a single, global
corporate brand rather than individual
product brands.
• The payback on marketing expenditures is
measured rigorously to the satisfaction of
the hard-nosed engineers and finance staff
who run the typical B2B enterprise.
• Coordination of company websites
worldwide to present a consistent face to
stakeholders is the best way to get control of
marketing communications that may have
become too decentralized.
Why should brand-building be important to
B2B CEOs?
First, most B2B marketers have to address
thousands of small businesses as well as
enterprise customers. They cannot do so
economically using the traditional direct sales
force.
Second, if left unattended, individual
managers will each do their own ad hoc
marketing. The result will be a hodgepodge of
corporate logos, taglines, and packaging.
Customers will be confused and the company
will look disorganized.
Third, B2B marketers are realizing that
developing brand awareness among their
customers' customers can capture a larger share
of channel margins and build loyalty that can
protect them against lower-priced competitors.
Consider these examples:
• Intel is the ultimate ingredient brand. It
makes zero sales to end consumers, yet Intel
built a consumer demand pull for its chips
that required every PC manufacturer to
incorporate them and to advertise Intel
Inside on their products and in their ads.
Other ingredient brands include Gore-Tex,
Teflon, and even the Boeing 787
Dreamliner (as a differentiating ingredient
for early adopter airlines).
• GE and Microsoft are hybrid brands with
some direct-to-consumer sales that have
helped to build the reputations of what are
primarily B2B firms. But these enterprises,
although selling to businesses, want to be in
touch with end consumers—with their
aspirations and needs. That is a source of
competitive advantage in driving their
innovation agendas.
• Accenture sells nothing to consumers. But
its "Performance Delivered" campaign,
backed by the advertising presence of Tiger
Woods, has created a positive awareness of
the brand among hundreds of thousands of
people who may be working for the
enterprises to which Accenture consults (or
is seeking to consult). And the motivational
value of inviting top customers, prospects,
and employees to golf events involving
Woods cannot be underestimated.
Would Dupont's shareholder value be the
same today if it had not made consumers aware
of nylon, Lycra, and Stainmaster and linked
these innovations to the Dupont name?
Definitely not.
Do you think brand-building is essential for
B2B companies? Have you seen other
characteristics of leadership in smartly branded
B2B companies?
Join the discussion on Harvard Business
Online.
About the author
John Quelch is Senior Associate Dean and
Lincoln Filene Professor of Business
Administration at Harvard Business School.
1