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

Muhammad Sajid Saeed Glasgow 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), ³Key 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: ³The 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

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making unit as compared to B C markets (Harrison et al 2006). Industrial markets are different from consumer markets not onl 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-tobusiness 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.
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Aimed at intermediate value provider Two way relationship Small number of customers Buyers reached through specialized media Multi-step buying cycles Relatively complex product offering Never on impulse Marketing is about educating

Aimed at the end-user Transaction or One way relationship Large number of customers Buyers reached through mass media Short sales cycles Relatively simple product offering Purchase can be an impulse Marketing about convincing 

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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: ³A 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 ( ) ± Factor in luence in buil ing success ul bran s

Brand equity has been popular topic among researcher¶s community from more thn a a decade. Different definitions of brand equity exists in marketing and management literature ; for instance, Aaker (1991) defined brand equity as ³The 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.

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Source: Jobber (200 )

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 customerbased 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.
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Fi re 4 evised CBBE Pyramid for B2B based on Keller, 993

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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): ³Brand 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:

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.
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In these days, social branding is also playing a vital role in managing B2B brands. Today, companies use famous words such as ³corporate citizenship´ and ³Corporate 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 µChange 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, µis branding suitable for all B2B brands?¶ and if it is suitable then µwhat 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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