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Managing industrial brand equity: Developing tangible benets for intangible assets
Judith Lynne Zaichkowsky , Myles Parlee, Jeanette Hill
Faculty of Business Administration, Simon Fraser University, 500 Granville Street, Vancouver, B.C. Canada V6C 1W6
a r t i c l e
i n f o
Article history:
Received 15 September 2008
Received in revised form 8 March 2009
Accepted 2 June 2009
Available online 21 March 2010
Keywords:
Brand equity
Intangible assets
BrandAsset Valuator
a b s t r a c t
Young and Rubicam's (Y&R) BrandAsset Valuator (BAV), commonly used to assess brand equity in
consumer markets, was applied to assess the brand health of an industrial B2B supplier. Customers were
asked questions about perceived esteem, relevance, knowledge and differentiation of the company to nd its
strengths and weaknesses. The results were then plotted to reveal the overall customer perception of the
company and also its competitors. Through this plot, the strategic direction how to improve the brand equity
of the company became clear. Evidence suggests that the BAV can be used in industrial markets to assess the
brand equity of the rm.
2010 Elsevier Inc. All rights reserved.
1. Introduction
The concept of brand equity, or the sustainable added value of a
brand name, has been the focus of marketing since the early 1990s (e.g.,
Aaker, 1996a; Keller, 1993). Some of the major interdependent factors
that contribute to brand equity in consumer markets are brand
awareness, brand association, perceived quality, and brand loyalty.
What every marketer is very interested in is loyalty. Measuring the
equity of a brand and determining its value are a must for predicting the
loyalty of one's present customers and also acquiring new ones. While
most of the brand equity literature pertains to consumer markets, it is
clear there is great relevance of the concept of brand equity to industrial
markets (e.g., Rauyruen & Miller, 2007), as both types of marketing
organizations are concerned about acquiring new customers and
keeping current ones highly satised.
The B2B and buyer behaviour literature highlights the value of
tangible and intangible brand assets in creating brand equity. Both types
of assets affect the customer's perception in regards to product
performance, distribution, services and company image. What differentiates companies in both markets goes far beyond the easily measured
tangible dimensions of objective product quality and price (Frederick,
2004; Michell, 2001; Mudambi, 1997). The intangible concepts of
relationship quality and relationship value are well articulated and
integrated to the B2B literature (e.g., Walter, Ritter & Gemunden, 2001;
Walter et al., 2003; Ulaga & Eggert, 2005). Capturing the value of these
intangible assets and using that information in a concrete manner to
improve the standing and perception of the company is a primary goal in
industrial brand management.
777
to attract more business from the highly tangible cluster may focus on
the many tangible, quantiable, and objective benets of the product
itself, and of the manufacturer behind the product. These ndings are
important to keep in mind for understanding why different marketing
strategies may be needed for different types of customers.
2.2. Tangible and intangible assets create value and loyalty
2. Literature review
2.1. Adapting brand equity to the B2B market
Keller's (1993) customer-based brand equity model was applied to
measure brand valuation in a B2B context (Kuhn, Alpha, & Pope, 2008).
The research found that, amongst organisational buyers, there is greater
emphasis on the selling organisation including its corporate brand,
credibility and staff, than there is on individual brands and their
associated dimensions. In the B2B brand equity pyramid, customer
feelings are replaced by salesforce relationships in accordance with the
experience based focus of B2B brand equity. Also imagery is replaced by
reputation, focusing on the intangible brand assets most relevant to B2B
organizations. The current thinking about the B2B brand equity
structure is shown in Fig. 1.
One may think of the bottom layer as what does the customer
know about the company?, or the customer's objective knowledge of
the corporation. The second layer of performance and reputation can
be thought of the corporation and its reliability. The third and fourth
layers of the pyramid may be the more intangible assets of relationships so often thought as vital to any B2B company. The value of the
B2B brand pyramid may be in understanding that customers must
know who the company is and what it stands for, before relationships
can be built.
Mudambi (2002) demonstrated the relevance of industry segments
to different branding strategies. A survey of industry buyers categorized
respondents into three groups: highly tangible (47%); branding
receptive (37%); and low interest (14%). The major nding of this
classication is that branding is not equally important to all companies,
customers, or in all purchase situations. The branding receptive cluster
could be described as large volume, more sophisticated companies who
viewed the purchase as highly important and risky. Therefore a
branding strategy focusing on customers in this cluster might
communicate the potential importance of the purchase decision.
A strategy for the low interest group might focus on attractive
product catalogues and web sites in an attempt to increase buyer
interest in the product and in the purchase decision. Branding strategies
778
Table 1
Tangible and intangible attributes for purchase decisions in B2B markets.
(Adapted from Mudambi, 1997).
Dimension
Tangible attributes
Intangible attributes
Product
Distribution
Support services
Company
Fit, no defects
Lead time
Range of services
Prot/revenue
779
780
Table 2
Prole of customer respondents.
N = 171
N = 67
N = 104
Total
(%)
Single source
(%)
Multiple source
(%)
14.9
10.3
15.5
59.2
9
11.9
11.9
67.2
18.6
9.3
17.8
54.2
44.3
17.4
24
14.4
34.8
16.7
30.3
18.1
50.5
17.8
19.8
11.9
Number of employees
199
100199
200399
Over 400
2 = n.s
21.3
19
18.3
41.4
18
13.4
17.9
50.7
23.4
22.4
18.7
35.5
Industry sector
Pulp and paper
Forestry and lumber
Mining
Food and agriculture
Oil and gas
Other
2 = 152, df = 5, p b .01
18.4
14.4
12.6
7.5
19.5
27.6
29.9
17.9
7.5
9
17.9
17.9
11.2
12.1
15.9
6.5
20.6
33.6
28.2
14.4
30.5
13.8
13.2
17.9
17.9
31.3
25.4
7.8
34.6
12.1
29.9
6.5
16.8
An alternative solution might have been to pick one item to represent each
dimension. However there would have been no differences in the result.
Differentiation
Relevance
Esteem
Knowledge
Strength
(differentiation + relevance)
Stature
(esteem + knowledge)
3.53
4.38
3.84
3.21
3.95
3.23
3.99
3.48
3.22
3.61
(.61)
(.39)
(.58)
(.35)
(.39)
3.53 (.35)
(.52)*
(.66)*
(.73)*
(.40)
(.51)**
3.35 (.46)**
781
Fig. 2. Perceived brand equity of Company A: Differences between single and multiple source customers.
Table 4
Evaluation of company attributes by single and multiple source customers.
Price
Product quality
On-time delivery
Technical support/customer
service
Company A
Single source
N = 67
Company A
Multiple source
N = 104
Competitors
Multiple source
N = 104
3.67
4.19
4.30
4.46
3.33 (.65)b*
3.97 (.67)b**
3.69 (.88)b**
3.91 (.94)b**
3.38 (.72)b
3.91 (.65)b
3.69 (.78)b
3.75 (.92)c
(.68)a
(.66)a
(.68)a
(.73)a
Numbers with different superscripts are signicantly different. *p b 0.05; **p b 0.001.
revamp the company website, making front and centre information that
the company has been in business for 60 years, has established ofces in
North and South America, and list the various diverse industries it
services were made and then implemented by the company. Company
letter head might also logo the in business 60 years, to add a consistent
message. This dimension of knowledge also speaks indirectly to the
perception of reliability, through length of time in service. The reader
might think of this emphasis on knowledge of the supplier as the reverse
dimension of Anderson and Narus (2003) emphasis on knowledge of
the customer. Not only is it important that you know your customer, but
it is equally important that the customer knows who you are and the
scope of your business.
Customers, who multi-sourced, saw little differences between
Company A and its competitors, except in the area of after-sales
service and technical support. Therefore recommendations to the
company were to focus on the real company competitive advantage of
Table 5
Predicting group membership: results of the discriminant analysis.
Predicted group
Original group
Single source
Multiple source
Single source
Multiple source
Total*
50 (76%)
28 (28%)
16 (24%)
73 (72%)
66
101
Variables
Discriminating function
1. On-time deliverya
2. Relevanceb
3. Technical supporta
4. Role of purchaserc
5. Pricea
6. Esteemb
7. Differentiationb
8. Order valuec
9. # of employeesc
10. Qualitya
11. Total salesc
12. Locationc
13. Knowledgeb
.61
.54
.52
.49
.43
.43
.40
.28
.24
.22
.20
.16
.04
.75
.49
782
783
Ulaga, W., & Eggert, A. (2006). Relationship value and relationship quality: Broadening
the nomological network of business-to-business relationships. European Journal of
Marketing, 40(3,4), 311327.
Ulaga, W., & Eggert, A. (2006, January). Value-based differentiation in business relationships: Gaining and sustaining key supplier status. Journal of Marketing, 70, 119136.
Walter, A., Ritter, T,., & Gemunden, H. G. (2001). Value creation in buyerseller
relationships. Industrial Marketing Management, 30, 365377.
Walter, Achim, Muller, T. A., Helfert, G., & Ritter, T. (2003). Functions of industrial
supplier relationships and their impact on relationship quality. Industrial Marketing
Management, 32, 159169.
Young and Rubicam (1994). BrandAsset Valuator. London: Y&R.
Value Based Management, (March 25, 2008). Measuring brand value, explanation of
BrandAsset Valuator of Young & Rubicam. Value Based Management Dictionary. J.H.M.
de Jonge, ed. Retrieved July 16, 2008, from http://www.12manage.com/methods_
brand_asset_valuator.html
Judy Zaichkowsky is the Professor of Marketing and Communications at the
Copenhagen Business School. Myles Parlee is with Starbucks, and Jeanette Hill is with
Yellow Hat. Myles and Jeanette are graduates from the Faculty of Business
Administration at Simon Fraser University.