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Debunking Common Myths of B2B Branding For SMEs

By Dr Wilson Chew, Group Principal Consultant & CEO, StrategiCom

Abstract
Looking at Singapore’s 2009 Enterprise-50 winners, one cannot help but notice that almost 90
per cent of these exceptional companies are B2B in nature. Yet as everyday consumers, we are
naturally more exposed to consumer brands than B2B ones. But is branding important for B2B
companies? Branding across different types of companies both B2C and B2B, is a key strategy
to achieving a vibrant SME sector and nurturing globally competitive companies.

Introduction
Branding as a philosophy of organisational change is well understood in many B2C organisations;
but this is not the case in the B2B sector, particularly among SMEs. Generally, this is due to the
misconception of corporate and product branding. Let’s examine some of the most common
myths of B2B Branding, and attempt to debunk them.

Brand Myths - Let’s Debunk Them

Myth 1: Branding only for Consumer Products; NOT Services

Many B2B SMEs think that branding is for consumer products or consumer-based companies. In
a recent meeting with a successful offshore and marine company, a branding proposition was put
forward and rejected not because of the demerits of the proposition but simply because the
CEO’s view was, “please please…we are not selling Coca Cola”. Obviously in his view, corporate
brand building was unnecessary.

To be successful, businesses need to invest in building a strong brand, especially B2B


companies. To Asian SME owners, branding is an emotional consumer-concept based purely on
emotional associations fueling buying decisions. In fact, scholars Cayla and Eckhardt argue that
the two major challenges for Asian brands are negative country of origin perceptions and regional
positioning being intrinsically frail. However, that provides clear opportunities for regional branding
initiatives1 . Brands can achieve a regional positioning by centering on Asian modernity;

1Cayla and Eckhardt, 2007. "Asian brands without borders: regional opportunities and challenges". Journal: International
Marketing Review. Volume: 24, Issue: 4, Pg: 444 - 456. Publisher: Emerald Group Publishing Limited
capitalising on newfound Asian pride and the confidence that the region is to propel the next wave
of the global economy.

A good corporate brand insures corporate buyers against needing to know everything before they
buy, and against post purchase risks2 . In the purchasing of B2B products or services, corporate
buyers rarely know what they want in detail and which brands to choose from. A good brand
stands out3.

It is almost indisputable that a customer will pay more for a service from a reputable service
provider. Companies such as Accenture, IBM, PwC and EDS, extract greater margins than lesser
known competitors, even during economic downturns. Strong brands perform better even in the
equities market4.

Myth 2: Branding is for the Big, I am Small

Irrespective of size and resources, SMEs compete in a squarely competitive environment, filled
with fierce innovative activities, intense competition, and next generation products. This tough
and ever-changing setting provides the interface between SMEs and the need for brand
strategy 5.

Perhaps, the fact that big companies such as Intel, Cisco Systems, Ingersoll and Hutchison invest
so much in building their brands may have given rise to the perception that “branding is a Big-
Boys game”. But it is also important to note that it is the continuous process of brand building
which has helped them become big and it continues to ensure sustainability and market position.
These companies were once medium and small 6.

2Kapferer, 2004. “The New Strategic Brand Management: Creating and Sustaining Brand Equity”. 3rd Edition. Published
by Kogan Page.

3McDonald et al, 2001. "Corporate marketing and service brands - Moving beyond the fast-moving consumer goods
model". Journal: European Journal of Marketing. Volume: 35. Issue: 3/4. Page: 335 - 352. Publisher: MCB UP Ltd

4Chew, 2007. “DMG-StrategiCom Study on Brand Strength versus Share Returns Expectation”. A research study
undertaken by StrategiCom and DMG.

5 Krake, 2005. "Successful brand management in SMEs: a new theory and practical hints". Journal: Journal of Product &
Brand Management. Year: 2005. Volume: 14. Issue: 4. Page: 228 - 238. Publisher: Emerald Group Publishing Limited.

6Chew & Tai, 2006. “Transforming Your Business Into A Brand – The 10 Rules of Branding”. Book published by Marshall
Cavendish.
Successful branding helps to achieve brand differentiation7. Big and small companies alike must
align their value propositions and unique selling propositions into a coherent message for
perception building. Failing which, you will never be remembered.

Small companies, be it with lesser resources, must not fall into the “branding is only for the big
boys” trap. SMEs need to build strong brands in their own niche in order to ward off big boys.
Strong brands are built not just by the tactical marketing dollar; but must be coupled with the
collective experience of what it stands for. When SMEs don’t think they need branding, they are
set on NOT being the next big story. It is likely they will continue to struggle for growth for a long
time.

Myth 3: My Customers Know Me – So No Need for Branding

SMEs think that as long as their customers know them, they do not need branding. They are of
the opinion that close relationships are the “be-all” of sustainability. While relationships are
important to business, this pre-occupation is a trap which leads to low rate of growth. If such
attitudes are ingrained within corporate culture, companies will find it difficult to acquire new
customers, because it takes a greater effort and a longer time to build good customer
relationships8 .

A strong brand makes it easier for an SME to attract new customers. It is also common
misconception to assume that “features and benefits” are the factors that drive customers’ buying.
In reality, business buying decision is greatly influenced by the brand reputation of partners9 .
Research has shown that the real driving force behind market leadership is perceived value—
neither price nor inherent product attributes. Hence, do not just bet merely on customer
relationships; build a strong brand so that prospects recognise the brand even before they meet
the brand representatives.

Myth 4: Niche - NO Competition

7 Kapferer, 2004. “The New Strategic Brand Management: Creating and Sustaining Brand Equity”. 3rd Edition. Published
by Kogan Page.

8Munoz and Kumar, 2004. "Brand metrics: Gauging and linking brands with business performance." The Journal of Brand
Management, Volume 11, Number 5, 1 May 2004 , pp. 381-387(7). Publisher: Palgrave Macmillan

9Hutton, 1997. "A study of brand equity in an organizational-buying context." Journal: Journal of Product & Brand
Management. Year: 1997. Volume: 6. Issue: 6. Page: 428 - 439. Publisher: MCB UP Ltd
Let’s start on this note; there is NO such thing as “no competition”. Products which are patented
and designs which are protected are targets of intellectual property breaches.

Even if an SME is the only player in its own niche, it needs to commit resources to branding
simply because no company is insulated from competition. The more attractive the niche, the
more players it will attract10.

If an SME has first-mover advantage; it must do everything to protect its market presence. When
3M first dominated the “innovation" category, the company did everything necessary in
communicating that position internally and externally. Today, 3M has competitors in most of its
markets. First-movers have to start branding from inception and assume total ownership of the
niche category. Branding will enable first-movers the advantage of claiming their place in their
category and dominance in competition11.

Myth 5: My Product Brands Drive the Business

A name and a logo are identity components of a brand; it is NOT the brand. Brands articulate
values. This encompasses all the associations, perceptions and experiences of the product,
service and the company; at every touch point from sales to billings to after-sales-service 12.
Having a name to your product without it communicating certain values, promises or connotations
is futile and empty13. Nevertheless, having well-known product brands is still not sufficient. Some
SMEs fall into the trap of neglecting the corporate brand thinking that as long as their product
brands are strong, they are in good shape.

When SMEs fail to see the benefits of branding the corporation and assume that product
branding is sufficient in sustaining the company, the marketing of each new product becomes a
higher budgeted affair14 . A good corporate brand helps propel products within the same group.
Confidence at a corporate level can steer confidence at a product level.

10
Redfern, 2002. "Creating Market Opportunities for Small Enterprises: Experiences of the Fair Trade Movement".
Geneva, International Labour Office, 2002

11 Weerawardena et al, 2006. "Does industry matter? Examining the role of industry structure and organizational learning
in innovation and brand performance. Journal of Business Research, Volume 59, Issue 1, January 2006, Pages 37-45

12Chernatony and McDonald, 2003. "Creating Powerful Brands". Third Edition - Paperback. Published by Elsevier
Butterworth Heinnmann.

13 Tai, 2008. “Get A Name – The 10 Rules of Naming Brands”. Published by Marshall Cavendish.

14 Keller, 1998. "Strategic Brand Management". Published by Pearson Education International. Edition 3. Page 433.
Take Singtel for example. The confidence which the business brand carries also brings a sense of
confidence to the single telecommunications consumer. There are many telecommunications
providers in the marketplace but they all have varied market and user perceptions as a company.
Further, it is my personal opinion that it takes both the strength of a corporate and product/service
brand for investment attraction.

Myth 6: Advertising is Branding

It is important to note that advertising is a form of marketing and has little to do with branding15.
Branding is the process of determining the product, service or company’s positioning,
differentiation and everything else necessary to determining the desired perception of its
stakeholders16 . It requires an understanding of the long term goals of the organization, product or
service.

This sore misunderstanding has led SMEs into spending aimless marketing dollars directed at
promoting meaningless brands which receive negligible traction. As SMEs globalise, as much as
it is important to ask, “how can we drive new sales quickly?” an equally important question is,
“can the market accept the brand at the desired price point?”

Myth 7: Services Can’t Be Branded

In packaged goods, the product is the primary brand. However, with services, the company is the
primary brand17. Successful service brands in the business community today make a case for
service branding as a cornerstone of services marketing.

A very clear and simple example is the comparison of Ernst & Young and a run-of-the-mill
accounting firm. In your opinion, which firm charges the premium and attracts the larger
customer? B2B service-centric companies that neglect the branding of their services often find it
difficult to get new customers and businesses. This results in having to provide trial services for a
lesser price. The falsehood that smaller service companies can never go for big clients is perhaps

15
Rao et al, 2004. "How Is Manifest Branding Strategy Related to the Intangible Value of a Corporation?" Journal of
Marketing. Volume: 68. Issue: 4. October 2004. Page(s): 126-141

16 Chew & Tai, 2008. “Killer Differentiators – 13 Rules of Growing Your Brand”. Published by Marshall Canvendish.

17 Berry, 2008. "Cultivating service brand equity" Journal of the Academy of Marketing Science. Issue Volume 28, Number
1 / December, 2000. Pages 128-137. Publisher Springer Netherlands.
why smaller service firms don’t bother to define their differentiation. This is a perfect formula for
borderline performance. Smaller firms can create specialist corporate brands18 .

One of the critical components of a successful service brand is brand delivery. The consistency
in the quality of service is something that service companies have great difficulty trying to
maintain and sustain throughout the buying cycle. B2B services in particular are deemed to be
more difficult than B2C service companies because in the latter’s circumstance, a routine-selling
process can be operationalised. High value and high customization B2B services do experience
greater difficulty. By this same token, it is all the more important for high value service companies
to define their brand.

Myth 8: Products Will Move On Their Own with Reputation

This myth stems from the over-confidence that a strong corporate brand would be sufficient to
move any product or service offering. If the corporate brand and the singular product are
synonymous or if it’s a service company then this theory may work.

Resellers or distributors who rely on principal brands for revenue generation should seriously
consider developing their own corporate brand, proprietary product brands or augmented service
brands so that their sustainability is not placed at risk19 .

Let’s return to the 3M example. 3M is known as an “Innovation” company; creative for its new
product lines. It is also known for its huge range of B2B and B2C products. 3M has a strong
corporate brand which stems from its recent re-position statement, “Innovative and Practical
Solutions from a Diversified Technology Company”20. It is generally known that a 3M product
would be more readily accepted compared to a similar competing product. Albeit so, 3M’s product
range (which is very wide) is reflected in its tagline, yet each singular product has its own brand
strategy, marketing and operations-to-market teams.

Myth 9: Branding Is a Waste of Money because it can’t be measured

18 Moorthi, 2002. "An approach to branding services." Journal: Journal of Services Marketing. Vol: 16. Issue: 3. Page: 259
- 274. Publisher: MCB UP Ltd

19 Porter, 1998. “On Competition”. Published by Harvard Business Review.

20 http://solutions.3m.com.sg/wps/portal/3M/en_SG/World/Wide/ visited on 22 January 2010.


This is the greatest and the most difficult myth to debunk because this misconception is usually
deeply ingrained in the minds of SME business owners. Brands can be measured and are
measured with various scales and measures21 . But whatever the determined methodology, the
underlying agreed understanding is that perception is what’s being measured when measuring
the strength of a brand; not sales figures. The strength of a brand and its contribution to sales is
an indirect one. Strong brands make selling easier. Sales figures however, are indicators of
sales effectiveness. While it is true that tactical sales effectiveness can draw in profits for a
company, it does not necessarily mean that brand strategy is not important 22.

The simple and clear truth is this: corporate buyers regularly give well-branded firms more
permission in terms of greater allowances and more opportunities than lesser-known competitors.
Corporate buyers are more likely to allow well-branded companies greater access. Any sales and
marketing person who has ever tried to see a prospect knows that when the meeting is set, half
the “battle is won”23 . One way corporate buyers assess whether an appointment is to be granted
is the knowledge of the existence and perception of such a company. The difference between
those that gain access and those that don’t is a strong brand.

Corporate buyers place more trust in well-branded companies. Trust, an intangible quality, is
directly related to the level of brand permission (i.e. the allowance of error with little or no
penalty)24 . Branding works on building positive perceptions to influence the hearts of corporate
purchasers even when they are well-informed of the product and service’s technical
specifications. Strong positive perceptions can draw sales, ceteris-paribas, and the company with
the stronger brand wins.

Conclusion

“Just get out and sell more” is a common catchphrase in many companies. What many B2B-
SMEs don’t realise is that every staff in the company is involved in brand building. Every
interaction with customers contributes to the overall perception and understanding of the brand.

21Romualdas & Gudaciauskas, 2004. "Brand Valuation Model." Journal of Business Economics and Management. Vol. 5,
no. 3, pp. 143-153.

22
Webster, 2000. "Understanding the relationships among brands, consumers, and resellers." Journal of the Academy of
Marketing Science. Issue Volume 28, Number 1. Pages 17-23. Publisher Springer Netherlands.

23Taylor, 2004. "The importance of brand equity to customer loyalty." Journal of Product & Brand Management. Volume:
13. Issue: 4. Page: 217-227. Publisher: Emerald Group Publishing Limited.

24 Chew, 2010. “An analysis of trust in a corporate brand in a b2b services context”.
A strong brand will deliver real business returns; although not directly. Research has also
established that there is a correlation between employee-understanding of brand values and
productivity 25. This translates to stronger advocacy for the organisation and better standards of
customer service. Studies have also shown that companies with staff, who better understand the
organisation goals defined by the future of the brand, enjoy greater shareholder returns26 . The
reasons are simple. A strong, clear, well-defined brand gives focus to employees; it motivates
them and provides direction and better decision-making in the workplace. Focusing on sales and
cost cutting alone is not enough. Building a strong brand will take you further.

We have examined 9 of the “deadliest” myths of branding B2B SMEs. Business owners who
continue to trust in them are short-changing themselves. They are wasting new opportunities a
strong brand can bring. When a company has no brand reputation, a lowered price becomes the
only reason for deal making.

About StrategiCom

StrategiCom is a global B2B brand strategy consulting firm headquartered in Singapore with 11
offices and 110 consultants & researchers around the world. The industries it serves include
Information Technology, Oil & Gas, Petrochemicals, Commodities Trading, Business Services,
Pharmaceutical, Medical & Healthcare, Transport & Logistics, Construction & Real Estate,
Precision Engineering and Electronics Manufacturing. StrategiCom's consultants, researchers
and proprietary methodologies provide the catalyst for companies to transform from traditional
businesses into differentiated brands.

http://www.strategicom.com

25 Backhaus, 2004. "Conceptualizing and researching employer branding." Career Development International. Vol:9. Iss:
5. Page: 501-517. Publisher: Emerald Group Publishing Limited

26Kerin and Sethuraman, 2008. "Exploring the brand value-shareholder value nexus for consumer goods companies."
Journal of the Academy of Marketing Science Issue Vol 26, No.4. Pages 260-273. Publisher Springer Netherlands.