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Brands in business markets

Brands are often thought to be the preserve of consumer markets, but increasingly business marketing is waking up to the fact that brands have value in business markets to.

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Brands used to be thought of as the exclusive preserve of consumer and FMCG (fast moving consumer goods) markets. Business markets, so the theory went, are based on rational purchasing focusing on functional benefits and technical specifications. Brands were not seen as important in business contexts.

But when a company is signing a large contract it has to take it on trust that the supplier can deliver on its promises, it has to believe that the supplier will be someone you can work with, it has to believe that the supplier will be able to provide service and support in the event of problems. And at an individual level, no purchaser wants to find they have made the wrong decision about a supplier on a large contract. As IBM salesmen used to say in the 70s "No one ever got fired for buying IBM".

Consequently brands can be and are used successfully in business markets. They offer both the opportunity for reassurance and they can provide prestige and visibility to the purchaser.

More recently, companies have been also been branding components through the supply chain. The best known companies for component brands are Intel and Du Pont (Lycra and Corian), but there are many other examples such as Shimano on bicycle gears, Dolby on sound systems or Nutrasweet in food. Component brands offer opportunities to manufacturers to reinforce the quality of the finished product, while also provide leverage for the component manufacturer to support higher margins.

Another variation which is starting to be seen in service and software markets is partnership branding where two separate companies use the combined strengths of their brands to allow them to enter or control a particular market segment. For example Apple and Adobe Photoshop among graphic designers and Intel and Microsoft for computers in general. (In consumer markets this works with Hotpoint recommends ... or similar). In the longer term this stretches into consortia and joint ventures. However, even small businesses will also use partnership-branding with larger companies and suppliers as a mechanism for enhancing the value of their own offer to a marketplace.

Brands in business markets are often connected to reassurance about reliability or service. For many purchases going into a supply chain where the products are components of some finished product, service can be as important as price in decision making and so establishing a reputation for service can be vital. The 'quality of supply' is particularly important in industries with lean manufacture or distribution channels.

The second element of a brand is to support intellectual property or to simplify complex products - for instance in software the brand simplifies the selection of a complex set of elements under a single name. In addition, the legal value of the trademark in such situations may be more effective at preventing copies from competitors than copyright.

For help and advice on business branding contact info@dobney.com