jbim cover (i).

qxd 17/10/2007 08:54 Page 1

ISSN 0885-8624
Volume 22 Number 6 2007

Journal of

Business & Industrial

Marketing
Branding in industrial markets
Guest Editors: Michael Beverland,
Adam Lindgreen and Julie Napoli

www.emeraldinsight.com
Journal of Business & Industrial Marketing
Volume 22, Number 6, 2007
ISSN 0885-8624

Branding in industrial markets

Guest Editors: Michael Beverland, Adam Lindgreen and Julie Napoli

Contents
354 Access this journal online 394 Branding the business marketing
offer: exploring brand attributes in
355 Guest editorial business markets
357 Being known or being one of many: Michael Beverland, Julie Napoli and
the need for brand management for Raisa Yakimova
business-to-business (B2B) 400 Sources of brand benefits in
companies manufacturer-reseller B2B
Philip Kotler and Waldemar Pfoertsch relationships
363 Branding in B2B markets: insights Mark S. Glynn, Judy Motion and
from the service-dominant logic of Roderick J. Brodie
marketing 410 Multiple roles of brands in
David Ballantyne and Robert Aitken business-to-business services
372 Branding implications of partner Jane Roberts and Bill Merrilees
firm-focal firm relationships in 418 The role of corporate brand image in
business-to-business service the selection of new subcontractors
networks Anna Blombäck and Björn Axelsson
Felicia Morgan, Dawn Deeter-Schmelz and
Christopher R. Moberg 431 Executive summary and
implications for managers and
383 The importance of brand in the executives
industrial purchase decision: a case
study of the UK tractor market
Keith Walley, Paul Custance, Sam Taylor,
Adam Lindgreen and Martin Hingley

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Guest editorial
About the Guest Editors Michael Beverland is a Senior Lecturer in
Marketing at the University of Melbourne. He has published in several
journals including Business Horizons, European Journal of Marketing,
Industrial Marketing Management, Journal of Advertising, Journal of
Business & Industrial Marketing, Journal of Business Research, Journal
of Management Studies, and the Journal of Product Innovation
Management.
Adam Lindgreen is a Professor of Strategic Marketing at Hull
University of Technology. He has published in several journals, including
Industrial Marketing Management, Journal of Business Ethics, Business
Horizons, Journal of Marketing Management, and Psychology &
Marketing, among others.
Julie Napoli is a Senior Lecturer in Marketing at the University of
Melbourne. She has published in several journals, including Business
Horizons, International Journal of Advertising, Journal of Advertising
Research, Journal of Business Research, and Journal of Small Business
Management.
Introduction to the special issue on
branding in industrial markets
Branding is gaining prominence among business-to-business
marketers. However, extant research on branding in the
context of business-to-business marketing remains scarce,
with suggested conceptual frameworks lacking empirical
support. Current research suggests that brands play some
role in purchasing decisions in business markets, and that
brands provide a source of competitive differentiation.
Research also suggests that there are differences between
consumer and industrial brand management. While much
literature has been published on consumer brand
management, we lack guidance on key industrial brand
issues, however. Such issues include strategic brand
management, brand architecture, brand building and
maintenance, brand repositioning, and tactical branding
issues.
This special issue of Journal of Business & Industrial
Marketing addresses some of the research lacunae identified
above.
Following our own Guest Editorial, the first paper, “Being
known or being one of many: the need for brand management
for business-to-business (B2B) companies” by Philip Kotler
and Waldemar Pfoertsch, adds knowledge to the field of
business-to-business brand research by examining the need of
branding for business-to-business companies and analyzing
the options for success by means of the stock performance.
Long-term branding strategies, brand performance and firm’s
business performance are found to be positively correlated
with stock increase. Business performance can be improved
using current brand focus and guiding principles. Also, the
findings suggest that companies should not only focus on
brand development, but rather adopt a long-term branding
strategy.
Journal of Business & Industrial Marketing
22/6 (2007) 355–356
q Emerald Group Publishing Limited [ISSN 0885-8624]
355
The second paper, “Branding in B2B markets: insights
from the service-dominant logic of marketing” by David
Ballantyne and Robert Aitken, builds on insights from the
service-dominant logic of marketing. The authors explore
what reciprocal application of resources, knowledge, and
competencies for the benefit of another party means for
brands and branding in a business-to-business context. Also,
several managerial implications are identified as follows. Value
received comes from direct service interactions and
serviceability of goods in use – and is a firm’s principal
branding opportunity. Also, brand marks are transitional
communicative devices, stimulating brand recognition and
reputation. The paper suggests that firms develop or support
brand communities (web-based), contribute to the service
cycle episodes experienced by customers by developing a
strategic branding approach, and co-create value by co-
branding. Lastly, the paper argues that business-to-business
marketing could be emotion-based and not merely logic- and
rational-based.
The third paper, “Branding implications of partner firm-
focal firm relationships in business-to-business service
networks” by Felicia Morgan, Dawn Deeter-Schmelz, and
Christopher R. Moberg, examines, through a conceptual
model, how customers evaluate firms in a strategic, business-
to-business service outsourcing network, and how their
assessment of firms involved in co-producing after-sales
service affects their evaluations of a focal selling firm. Key
factors influencing this relationship include focal brand
strength and the strength of the relationship between the
partner firm and the focal selling firm. Among the study’s
findings are that post-sale business services provided directly
to the customer – irrespective of whether those services are
provided by the firm or its partners – play an important role
in building a firm’s brand image and equity. As such, this is
one of few studies investigating the way customers evaluate
service when it is performed by multiple partners, thereby
providing guidance on ways of improving the service
experience of network customers.
The fourth paper, “The importance of brand in the
industrial purchase decision: a case study of the UK tractor
market” by Keith Walley, Paul Custance, Sam Taylor, Adam
Lindgreen and Martin Hingley, examines the role of branding
in the industrial purchase of agricultural tractors in the UK.
Following explorative interviews with farmers and farm
contractors, the study identifies through conjoint analysis
the importance of five different attributes in industrial
purchasers’ decisions on tractor brand. Also, the importance
of the attributes by tractor brand ownership is identified.
Lastly, overall brand utility and brand utility by tractor brand
ownership are identified. Among the study’s implications are
that manufacturers and distributors need to maintain a strong
image. Also, they may charge higher prices for tractors, using
the extra revenue to reinforce their brand image. On-farm
demonstration of new tractors could be an experiential
marketing strategy. Special attention should be given to the
location of dealers and the service they provide.
The fifth paper, “Branding the business marketing offer:
exploring brand attributes in business markets”, by Michael
Beverland, Julia Napoli and Raisa Yakimova, considers
attributes for building strong brand identity:
.
product;
.
service;
.
logistics;
.
advice; and
.
adaptation.
 Guest editorial
Two types of brands benefit from product benefits: high
performance brands and ingredient brands. When a product
is conceptualized in terms of product innovation or
leadership, brand identity is linked to a firm-level capability.
Products may be augmented with services, suppliers may sell
services rather than products, and sub-contractors may
provide service capabilities to customers. Logistics,
consisting of capabilities and involving standardized and
customized components, are relevant for retailers seeking to
outsource category management. Suppliers of complex
services and product suppliers of heavy capital items may
pursue adaptation. Lastly, advice is relevant for advertising
agencies, market research agencies, business consulting, and
product suppliers, among others.
The sixth paper, “Sources of brand benefits in
manufacturer-reseller business-to-business relationships” by
Mark S. Glynn, Judy Motion and Roderick J. Brodie,
investigates, through a qualitative study of six grocery and
liquor retailers, what the financial, customer, and managerial
benefits of manufacturer brands are to resellers of packaged
goods. In so doing, the paper is one of the first studies to
examine the role of brands in channel relationships. The
findings help manufacturers to understand and manage their
brands’ benefits and, in turn, enhance the relationships
outcomes with resellers. These outcomes are satisfaction with
the brand, commitment to the brand, trust in the brand,
dependence on the brand, and cooperation with the
manufacturer. Among the study’s managerial implications
are that minor brands are also important to resellers, for
example in countering the strength of major brands in a
product category.
The seventh paper, “Multiple roles of brands in business-
to-business services” by Jane Roberts and Bill Merrilees,
investigates, through a quantitative study of 201 retail tenants,
the role of branding in the context of leasing mall space to
retail tenants. A four-stage process, which leads to renewal of
mall lease, was identified as fitting the data. Brand attitudes
could be explained mainly by service quality. The study also
identified that brand performance played two major roles.
First, brand performed a traditional role as a contributor to
the re-buy or repurchasing decision. Second, brand
performed a role as a builder of relationship quality. As
such, this paper is one of the first to examine the multiple
roles that brands can play in business-to-business marketing.
There are various practical implications of the study’s
findings. For example, the study’s findings may be used by
industrial firms to build stronger brands and, in turn, to use
these brands to build better relationships with their business
customers.
Finally, the eighth paper, “The role of corporate brand
image in the selection of new subcontractors” by Anna
Blombäck and Björn Axelsson, investigates why and how
corporate brand image plays a role in the selection of new
subcontractors. A qualitative study of three subcontractors
and six of their customers allows for an examination of
buyers’ and sellers’ considerations in sales and purchasing
processes. Among the study’s findings is that the role of
brands is to gain interest, as well as provide trust to
356
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 355 –356
customers. Explicit communications to build trust are
identified relating to different phases of the selection
process. These communications are discussed in terms of
content and source and are translated – in terms of
implications – to the subcontractors.
Specific issues not dealt with in this issue include: what are
current brand development practices in business marketing?
How is brand architecture managed in business markets
(including corporate branding)? Also, what are brand-
building and brand-repositioning capabilities in business
markets (the capabilities behind brand building, maintenance,
and growth)? What are brand extension and repositioning
strategies? What is the role of integrated marketing
communications in business-to-business branding? What are
important similarities and differences between branding in
business-to-business products and services? What are buyer
receptions to business-to-business branding efforts such as the
importance, or lack thereof, of brands in the purchase
process? What is the role of salespeople in business branding?
Are there different peculiarities of business-to-business brands
in international markets (including global branding issues)?
Lastly, how can business-to-business brands be valued?
We would like to take the opportunity of thanking all those
who have contributed towards this special issue of Journal of
Business & Industrial Marketing. First, we thank the reviewers
who have taken time to provide timely feedback to the
authors, thereby helping the authors to improve their
manuscripts. The reviewing was a double-blind reviewing
process. We thank the following reviewers:
.
Michael Antioco (Eindhoven University of Technology);
.
Liliana Bove (Melbourne);
.
Sonia Dickinson (Curtin University of Technology);
.
Andreas Eggert (Paderborn);
.
Mike Ewing, Francis Farrelly, Samir Gupta, and Raisa
Yakimova (all at Monash);
.
Victoria Little (Auckland);
.
Roger Palmer (Cranfield);
.
Leyland Pitt (Simon Fraser);
.
Pascale Quester (Adelaide); and
.
Christine Vallaster (Innsbruck).
Second, we would like to extend special thanks to the editor
Wesley Johnston (Georgia State University) for giving us the
opportunity of guest editing a special issue of Journal of
Business & Industrial Marketing.
Last, but not least, we warmly thank all of the authors who
submitted their manuscripts (not previously published
elsewhere) for consideration of inclusion in Journal of
Business & Industrial Marketing. We appreciate and are
grateful for the authors’ desire to share their knowledge and
experience with the journal’s readers – and for having their
views put forward for possible challenge by their peers. We are
confident that the articles in this Special Issue contribute to
our understanding of branding in business markets.
Michael B. Beverland, Adam Lindgreen and
Julie Napoli
Guest Editors
 Being known or being one of many: the need
for brand management for business-to-business
(B2B) companies
Philip Kotler
Marketing Department, Kellogg School of Management, Northwestern University, Evanston, Illinois, USA, and
Waldemar Pfoertsch
Pforzheim University, Pforzheim, Germany and China Europe International Business School, Shanghai, People’s Republic of China

Abstract
Purpose – This analysis aims to examine the need of business-to-business companies for branding and analyzes the options for success by means of
the stock performance.
Design/methodology/approach – The paper consists of a qualitative and quantitative pilot study and a quantitative main survey.
Findings – Long-term branding strategies, brand performance and firm’s business performance are found to be positively correlated with stock
increase. Current brand focus and use of guiding principles can lead to improved business performance.
Research limitations/implications – The study has possible location- and industry-specific limitations.
Practical implications – Managerially, the findings encourage firms to adopt a long-term branding strategy, focusing not only on brand development.
Originality/value – By systematically examining relationships between branding strategy and performance of the global firms, this study adds
knowledge to the field of B2B brand research.

Keywords Business-to-business marketing, Brand management, Marketing strategy, International marketing

Paper type Conceptual paper

An executive summary for managers and executive
readers can be found at the end of this issue.
Introduction
When talking about brands most people think of Coca-Cola,
Apple, Ikea, Starbucks, Nokia, and maybe Harley Davidson.
These brands also happen to be among the most cited best-
practice examples in the area of business-to-consumer (B2C)
branding[1]. For these companies their brand represents a
strong and enduring asset[2], a value driver that has literally
boosted the company’s success. Hardly any company neglects
the importance of brands in B2C.
In business-to-business (B2B), things are different –
branding is not meant to be relevant. Many managers are
convinced that it is a phenomenon confined only to consumer
products and markets. Their justification often relies on the
fact that they are in a commodity business or specialty market
and that customers naturally know a great deal about their
products as well as their competitors’ products. To them,
brand loyalty is a non-rational behavior that applies to
breakfast cereals and favorite jeans – it doesn’t apply in the
more “rational” world of B2B products. Products such as
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0885-8624.htm
electric motors, crystal components, industrial lubricants, or
high-tech components are chosen through an objective
decision-making process that only accounts for the so-called
hard facts like features/functionality, benefits, price, service,
and quality, etc. (Aaker and Joachimsthaler, 2000, p. 22;
Pandey, 2007). Soft-facts like the reputation of the business,
whether it is well known, is not of interest. Is this true? Does
anybody really believe that people can turn themselves into
unemotional and utterly rational machines when at work? We
don’t think so.
Is branding relevant to B2B companies? Microsoft, IBM,
General Electrics, Intel, HP, Cisco Systems, Dell, Oracle,
SAP, Siemens, FedEx, Boeing – they are all vivid examples of
the fact that some of the world’s strongest brands are B2B
brands. Although most also operate in B2C segments, their
main business operations are concentrated on B2B. Then why
are so many B2B companies spurning their fortune?
Take Boeing, for instance. Only a few years ago a very
interesting incident happened at the Boeing headquarters in
Seattle. Shortly after Judith A. Muehlberg, a Ford veteran,
started as head of the Marketing and Public Relations
Department, she dared to utter the “B” word in a meeting of
top executives. Instantly, a senior manager stopped her and
said: “Judith, do you know what industry you’re in and what
company you’ve come to? We aren’t a consumer-goods
company, and we don’t have a brand”[3]. Since then US
aerospace giant Boeing has come quite a long way. Nowadays,

Journal of Business & Industrial Marketing

22/6 (2007) 357– 362 Philip Kotler and Waldemar Pfoertsch have recently published B2B Brand
q Emerald Group Publishing Limited [ISSN 0885-8624] Management (Springer, Heidelberg/New York, NY, 2006, ISBN 978-3-
[DOI 10.1108/08858620710780118] 540-25360-0); parts of this paper are from this publication.

357
 Being known or being one of many
Philip Kotler and Waldemar Pfoertsch
branding and brand management do matter in a big way to
them. In 2000, the company’s first-ever brand strategy was
formalized and integrated in an overall strategy to extend its
reach beyond the commercial-airplane business. Today, the
brand spans literally everything from its logo to corporate
headquarters. Even the plan to relocate its corporate
headquarters from Seattle to Chicago has been devised with
the Boeing brand in mind (Khermouch et al., 2001). In 2005,
Boeing introduced its new flagship aircraft. In a worldwide
campaign with AOL, they searched for a suitable name and
invented the “Dreamliner”, which was inaugurated by Rob
Pollack, Vice President of Branding for Boeing Commercial
Airplanes Marketing[4].
What is branding all about anyway? First of all we can tell
you what it is not: it is definitely not about stirring people into
irrational buying decisions. Being such an intangible concept,
branding is quite often misunderstood or even disregarded as
creating the illusion that a product or service is better than it
really is (Hague and Jackson, 1994). There is an old saying
among marketers: “Nothing kills a bad product faster than
good advertising” (de Legge, 2002). Without great products
or services and an organization that can sustain them, there
can be no successful brand.
Now you may wonder what branding really is all about.
Scott Bedbury, author of the book A New Brand World puts it
as follows:
Branding is about taking something common and improving upon it in ways
that make it more valuable and meaningful (Bedbury, 2002, p. 14).
Brands serve exactly the same general purpose in B2B
markets as they do in consumer markets: they facilitate the
identification of products, services and businesses as well as
differentiate them from the competition (Anderson and
Narus, 2004). They are an effective and compelling means to
communicate the benefits and value a product or service can
provide (Morrison, 2001). They are a guarantee of quality,
origin, and performance, thereby increasing the perceived
value to the customer and reducing the risk and complexity
involved in the buying decision (Blackett, 1998).
Brands and brand management have spread far beyond the
traditional view of consumer-goods marketers. Brands are
increasingly important for companies in almost every
industry. Why? For one thing, the explosion of choices in
almost every area. Customers for everything from specialty
steel to software now face an overwhelming number of
potential suppliers. Too many to know them all, let alone to
check them out thoroughly.
For example, Pitney Bowes, one of the winners in Jim
Collins’s book Good to Great (Collins, 2001), has recently
introduced a new branding campaign. After being on the
success track for more than 15 years, they felt it necessary to
educate their customers about all their new products.
Chairman and CEO Michael J. Critelli explained on
Bloomberg television how Pitney Bowes’s new business-
building brand campaign will fuel the company’s long-term
growth strategy, and his Chief Marketing Officer Arun Sinha
elaborated that a brand is more than a product – it’s a
shorthand that summarizes a person’s feelings toward a
business or a product. A brand is emotional, has a personality,
and captures the hearts and minds of its customers. Great
brands survive attacks from competitors and market trends
because of the strong connections they forge with customers.
358
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 357 –362
And that is what Pitney Bowes wants to achieve with its B2B
customers.
The internet furthermore brings the full array of choices to
every purchaser or decision maker anywhere with just one
mouse click. Without trusted brands as touchstones, buyers
would be overwhelmed by an overload of information no
matter what they are looking for. But brands do not only offer
orientation, they have various benefits and advantages for
customers as well as the “brand parents”. They facilitate the
access to new markets by acting as ambassadors in a global
economy (Khermouch et al., 2001).
Another important aspect of B2B branding is that brands
do not just reach your customers but all stakeholders –
investors, employees, partners, suppliers, competitors,
regulators, or members of your local community. Through a
well-managed brand a company receives greater coverage and
profile within the broker community (Pandey, 2007).
Other than the biggest misconception that branding is only
for consumer products and therefore wasted in B2B, there are
other common misunderstandings and misconceptions
related to B2B branding and branding in general. One
frequently mentioned branding myth is the assumption that
“brand” is simply a name and a logo. Wrong! Branding is
much more than just putting a brand name and a logo on a
product or service.
Take a moment and try to think about what “brand” means
to you personally. Without a doubt certain products, brand
names, logos, maybe even jingles, pop into your head. Many
people think that this is all when it comes to defining brands.
But what about the feelings and associations connected with
these products, brands, companies? What about the articles
you’ve read about them? What about the stories you’ve heard
about them? What experiences have you had with those
products, brands, companies? We could go on and pose more
questions like these. A brand is an intangible concept. To
simplify it and make it easier to grasp is quite often equated
with the more tangible marketing communications elements
that are used to support it – advertising, logos, taglines,
jingles, etc. – but a brand is so much more than that (Dunn
and Davis, 2004; Knapp, 2000):
.
a brand is a promise;
.
a brand is the totality of perceptions – everything you see,
hear, read, know, feel, think, etc. – about a product,
service, or business;
.
a brand holds a distinctive position in customers’ minds
based on past experiences, associations, and future
expectations; and
.
a brand is a short-cut of attributes, benefits, beliefs, and
values that differentiate, reduce complexity, and simplify
the decision-making process.
Keeping all this in mind makes it clear that brands cannot be
built by merely creating some fancy advertising. If you
internalize the concept of “brand” as a promise to your
customers it is quite obvious that it can only come to life if
you consistently deliver on that promise. Of course, your
brand promise needs to be clearly defined, relevant and
meaningful, not to be mistaken with exaggerated marketing
promises.
A further misconception of branding is that it is seen as a
small subset of marketing management. Wrong again! Since a
brand is reflected in everything the company does, a holistic
branding approach requires a strategic perspective. This
 Being known or being one of many
Philip Kotler and Waldemar Pfoertsch
simply means that branding should always start at the top of
your business. If your branding efforts are to be successful, it
is not enough to assign a brand manager with a typically
short-term job horizon within company (Aaker and
Joachimsthaler, 2000).
Building, championing, supporting and protecting strong
brands is everyone’s job, starting with the CEO (Bedbury,
2002). Active participation of leaders is indispensable because
they are the ones who ultimately will be driving the branding
effort. Brands and brand equity need to be recognized as the
strategic assets they really are, the basis of competitive
advantage and long-term profitability. It is crucial to align
brand and business strategy, something that can only
effectively be done if the brand is monitored and
championed closely by the top management of an
organization Aaker and Joachimsthaler, 2000, p. 19). To
appoint a Vice President of Branding, someone who is
responsible solely for brand management, would be an
important step. No matter what the actual title, this person
should be the one person taking the required actions for
keeping the brand in line.
Strong leaders demonstrate their foresight for the brand,
make symbolic leadership gestures, and are prepared to
involve their business in acts of world statesmanship that go
beyond the short term, and therefore require the sort of total
organizational commitment that only the CEO can lead.
Consider Nucor, America’s largest steel producer today. In
1972, about five years after facing bankruptcy, F. Kenneth
Iverson as President and Samuel Siegel, Vice President of
Finance, renamed the company and announced “Nucor sells
steel to people who actually care about the quality of the
steel”. This announcement and all steps that followed
propelled the company to the top of its industry.
But do brands really pay off? Are they worth the effort and
time? Evaluating and measuring the success of brands and
brand management is a rather difficult and controversial
subject. Moreover, it is not always possible to attribute hard
facts and numbers to them, which most marketers certainly
prefer. As a result, there are only a restricted number of
research project and analysis dealing with the actual return on
investment for brands.
Current research results[5] highlight the power of branding.
To visualize the effect of brands and branding on share price,
they compared the financial market performance of 23 of the
30 German DAX companies (see Figure 1). The obvious
result of the enormous difference in performance accentuates
the general importance of brands. Companies with strong
brands have recovered significantly faster from the stock
market “slump” in the wake of the 9/11 terrorist attacks than
weaker brands. Strong brands provide companies with higher
return.
Companies that once measured their worth strictly in terms
of tangibles such as factories, inventory, and cash have to
revise their point of view and embrace brands as the valuable
and moreover equally important assets they actually are
(along with customers, patents, distribution, and human
capital). Companies can benefit tremendously from a vibrant
brand and its implicit promise of quality since it can provide
them with the power to command a premium price among
customers and a premium stock price among investors. Not
only can it boost your earnings and cushion cyclical
downturns, it can even help you to become really special
(Khermouch et al., 2001). The analysis of the largest DOW
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Volume 22 · Number 6 · 2007 · 357 –362
companies (see Figure 2) shows an even more drastic
situation[6].
The stock market success of the “over performers” was
even larger than in the first analysis. The top B2B brand
performers were:
.
Caterpillar;
.
GE; and
.
Hewlett Packard.
Caterpillar increased its position in an exceptional way. The
“under performers” were:
.
Intel;
.
IBM;
.
J.P. Morgan; and
.
Microsoft.
It is worth mentioning that between 2002 and 2005 Microsoft
continuously lost brand value. Even in 2002 when the crisis
hit strongly the brand did not lose too much stock value (only
2 6 percent, as compared with an average of 2 24 percent,
and 236 percent for the “under performers”). These data
stress the notion that weak brands particularly suffer in
difficult times and do not recover as quickly as strong brands.
These findings also suggest that the brand strength of B2B
companies clearly has an impact on financial market
performance.
Ongoing analysis of the largest global companies using the
same methods suggests that the Interbrand value (see
Figure 3) is positively correlated with market capitalization
throughout the years 1999-2006[7], and that the Interbrand
value is significantly positively correlated with income and net
income. We also showed that market capitalization is
significantly positively correlated with income and net
income. Market capitalization is not correlated with
advertisements.
The definition, benefit, and functions of brands embrace
every type of business and organization. In order to create and
maintain the sustainable competitive advantage offered by the
brand, companies need to concentrate their resources,
structure, and financial accountability around this most
important asset. Businesses with a strong brand positioning
are benefiting from clarity of focus that provides them with
more effectiveness, efficiency, and competitive advantage
across operations (Clifton and Simmons, 2003).
B2B brand advocates underline that the real importance of
brands in B2B has not yet been realized. McKinsey &
Company is one of them. Together with the Marketing
Centrum Muenster (MCM), one of the best known German
research institutes, they investigated and analyzed the
importance and relevance of brands in several German B2B
markets. They revealed that the most important brand
functions in B2B are (Caspar et al., 2002, p. 13):
.
increase information efficiency;
.
risk reduction; and
.
value added/image benefit creation.
Since these functions are essential determinants of the value a
brand can provide to businesses, they are crucial in regard to
determining brand relevance in certain markets (Caspar et al.,
2002). The above mentioned brand functions are also vital to
B2B markets.
Nobody can guarantee that a business will realize
immediate benefits after implementing an overall brand
strategy. Since branding requires a certain amount of
 Being known or being one of many
Philip Kotler and Waldemar Pfoertsch
Figure 1 Branding’s effect on DAX companies’ share price
Figure 2 Branding’s effect on DOW companies share price
investment, it is more probable that it will see a decline in net
profits in the short run. Brand building is aimed at creating
long-term non-tangible assets and is not meant for boosting
short-term sales. Michael J. Critelli, CEO of Pitney Bowes
(Sinha, 2003) is aware of this and ran re-branding efforts over
a period of many years to ensure his company’s future success.
In the 1980s, personal computers gradually entered the
homes of consumers. At that time the highly recognized brands
in the industry were those of computer manufacturers like IBM,
Apple, and Hewlett-Packard. Back then, only the most
sophisticated computer users knew what kind of
microprocessing chip their machines contained, let alone who
made them. All that changed in 1989, when Intel decided to
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Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 357 –362
brand its processors. Because of the accelerating pace of
technological change as well as constantly growing sales rates in
the consumer market, the company decided to focus on end
users. They realized that establishing a brand was the only way
to stay ahead of the competition. Today, Intel is a leader in
semiconductor manufacturing and technology, supported and
powered by their strong brand, an almost unbeatable
competitive advantage, due to the ingredient branding
approach and the “Intel Inside” campaign, an approach
which will be important for increasingly sophisticated
customers (Kotler and Pfoertsch, 2007).
It is also not the intention to claim that B2B branding is the
answer to all your company’s problems. Just as there are
 Being known or being one of many
Philip Kotler and Waldemar Pfoertsch
Figure 3 Correlation between Interbrand brand value versus market
capitalization of DOW companies
limitations in the B2C branding world, limitations also exist in
B2B. These restrictions still have to be identified and
examined thoroughly in the following years.
To lead you through B2B branding exercises we suggest a
set of “guiding principles” (see Figure 4) that illustrate
visually the different stages on the branding ladder[8]. It can
literally be seen as the path companies have to follow in order
to achieve brand success. The beginning of the path is marked
by the decision whether or not to brand your products,
services, or business. If a company, especially the people at
the top, is not convinced that it is the right thing to do, it
doesn’t make any sense to continue (“B2B Branding
Decision”). After making the decision to brand, you have to
figure out how you are going to do it. But deciding on the best
brand portfolio that fits your respective business/industry is
not enough to ensure your company’s brand success.
Therefore, the next stage addresses all the factors in
practice that make branding successful (“Branding
Dimensions”). If the right decisions are not taken
(“Acceleration through Branding”) or the execution falls
short, branding pitfalls can occur! But there could also be
future perspectives.
Figure 4 Guiding principles for B2B brand development
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Volume 22 · Number 6 · 2007 · 357 –362
The essence of this concept is to infect B2B companies with
the branding virus – empowering them to make the leap to
becoming a brand-driven and more successful company.
There are many ways to measure overall company success,
such as sales increase, share value, profit, number of
employees, mere brand value (index), etc. To keep it simple
and to limit alterations that may have been influenced by
various sources other than the actual brand, we chose sales
over time as measurement for a company’s success in our
Guiding Principle. The transition point represents a
company’s rise to the challenge of building a B2B brand.
In our constantly changing business environment of new
technologies, globalization and market liberalization, alert
companies are presented with great opportunities. Winning
companies will discard old practices and innovate new
practices to exploit the major trends. With no thought B2B
branding and brand management will become increasingly
important, and the future of brands is the future of business –
probably the only major sustainable competitive advantage.
Companies who are driving in this direction are on the right
track. Other future aspects are branding and social
responsibility. Also, branding in China is in a stage of
leapfrogging into the world market. For decades, China has
enjoyed a dominant place in world manufacturing because of
its low-cost labor. Chinese businesses today are pursuing
aggressive branding strategies involving internal growth or
acquiring foreign brand icons and managing them. Both
approaches could lead to world success. Consider design and
branding as an increasingly important tool for differentiation.
Relevance, simplicity, and humanity – not technology – will
distinguish brands in the future.
To be successful in the B2B world, a holistic branding
approach is required that covers everything from the
development and design to the implementation of marketing
programs, processes, and activities that are intersecting and
interdependent. Marketing and brand management will be
critical to a company’s success in the future.
Notes
1 B2C companies have for years dominated the Interbrand
ranking of the 100 best global brands by more than 80
percent, and most of the article is about them (see Berner
and Kiley, 2005).
2 According to our calculations, in 2005 the total brand
value for all 100 best global brands reached more than $1
trillion.
3 As quoted in Khermouch et al. (2001).
4 The Boeing Company (internet), cited August 2005.
5 In 2005, a qualitative and quantitative pilot study was
conducted with the 30 largest German DAX companies;
of these, ten were B2B companies.
6 For this analysis the Interbrand Global Best Brand data
were used to characterize the brand performance.
7 The Interbrand brand evaluation started in 1999 and is
available annually. In our research we compiled all
internationally available data, which led to a total of 130
companies. Further research is needed to qualify the
findings.
8 We understand the Guiding Principle as the leading idea
and guiding help to follow our thinking and the structure
of B2B brand management.
 Being known or being one of many Journal of Business & Industrial Marketing
Philip Kotler and Waldemar Pfoertsch Volume 22 · Number 6 · 2007 · 357 –362

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driven business: it’s the CEO who must lead the way”,
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Morrison, D. (2001), “The six biggest pitfalls in B-to-B
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branding”, Business2Business, July/August, p. 1.
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Pandey, M. (2007), “Is branding relevant to B2B?”, 27
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Sinha, A. (2003), “Branding in a deregulated environment”,
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Corresponding author
brands in the internet age”, Marketing Today, available at:
www.marketingtoday.com/marketing/1204/brand_v2.htm Philip Kotler can be contacted at: pkotler@aol.com

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362
 Branding in B2B markets: insights from the
service-dominant logic of marketing
David Ballantyne and Robert Aitken
University of Otago, Dunedin, New Zealand

Abstract
Purpose – This paper aims to explore how the service-dominant (S-D) logic of marketing proposed by Vargo and Lusch impacts on business-to-
business branding concepts and practice.
Design/methodology/approach – Vargo and Lusch argue that service interaction comes from goods-in-use as well as from interactions between a
buyer and a supplier. Their key concepts are examined and the branding literature critically compared.
Findings – Goods become service appliances. Buyer judgments about the value-in-use of goods extends the time-logic of marketing. The exchange
concept is no longer transaction bound. Service-ability (the capability to serve) becomes the essence of a firm’s value propositions. Service experience
becomes paramount in developing and sustaining the life of a brand.
Research limitations/implications – S-D logic highlights the need for rigour and clarity in the use of the term “brand”. It also opens up for
consideration a variety of previously unexplored contact points in the customer service cycle, expanded to include customer assessments of value-in-
use.
Practical implications – S-D logic encourages extending brand strategies into a wider variety of communicative interaction modes.
Originality/value – Some of the issues raised are not new but currently compete for attention in the shadow of media-dominant approaches to
branding.

Keywords Brand image, Value added, Value-in-use pricing, Marketing, Knowledge management, Relationship marketing

Paper type Conceptual paper

An executive summary for managers and executive
readers can be found at the end of this issue.
Introduction
The service-dominant (S-D) logic of marketing proposed by
Vargo and Lusch (2004a) emphasises that customers make
critical value assessments when goods are in use, based on
their service-ability. Put another way, goods become service
appliances and customers judge the worth of the service they
experience from goods as value-in-use. Thus “service”
according to S-D logic includes the service experience
derived from interacting with goods in use as well as from
service interactions with a supplier. So, by extending the
temporal dimension of marketing to cover the service
experiences derived from goods, and by aligning exchange
thinking around value-in-use, the concept of marketing
becomes service-dominant, and exchange is no longer
transaction-bound. Every value proposition is an offer of
service. Every business becomes a service business.
This brief introduction shows that the S-D logic of
marketing has both radical components and also familiar
associations for business-to-business (B2B) marketers.
“Service interaction” is broader in concept and extended in
time. It involves the reciprocal application of resources,
The current issue and full text archive of this journal is available at
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Journal of Business & Industrial Marketing
22/6 (2007) 363– 371
q Emerald Group Publishing Limited [ISSN 0885-8624]
[DOI 10.1108/08858620710780127]
knowledge and competencies for the benefit of another party.
The emphasis in S-D logic on value-in-use is potentially
paradigm challenging but the foundational principle of
interaction resonates well with much of contemporary
marketing thought in services marketing, relationship
marketing and B2B marketing.
Understanding what S-D logic means in particular for
brands and branding in a B2B context is the intent of this
article. We start with a commentary on the S-D logic thesis.
Next, we offer a critical examination of current thinking on
brand marks and brand meanings. Then, we examine the
contribution of S-D logic to understanding B2B branding.
From this, the role of marketing communication in all its
forms becomes clear as a source of brand meanings. Finally,
we draw some conclusions that we believe have important
implications for practitioners.
Commentary on S-D logic
The catalyst for the current interest in an S-D logic for
marketing was the publication of an award-winning article by
Vargo and Lusch (2004a) entitled “Evolving to a new
dominant logic for marketing”. In the same year, another
article by Vargo and Lusch (2004b) appeared, directly
challenging the validity of the characteristic differentiators
between services and goods (intangibility, heterogeneity,
inseparability and perishability), which had been established
more than 20 years earlier (see Fisk et al., 1993). In 2005, the
University of Otago in New Zealand invited a number of
leading international academics to The Otago Forum[1] to
debate the issues. A selection of papers from the Forum,
together with commentaries, later appeared as a special issue
of Marketing Theory (Aitken et al., 2006). Also, Lusch and
Vargo (2006a) published an editorial selection of articles by

363
 Branding in B2B markets: the service-dominant logic
David Ballantyne and Robert Aitken
leading scholars early in 2006. The Journal of the Academy of
Marketing Science will publish a special issue on S-D logic in
2007.
The idea behind the Vargo and Lusch thesis is simple, but
the effects are far reaching: S-D logic asserts that service is
what customers are hoping to buy, anywhere, any time. Of
course, service interaction in business markets is not new but
under S-D logic, goods purchased become service appliances.
In other words, a supplementary form of service experience
comes from goods, as buyers interact with those goods. If
goods become valuable to customers, as mechanisms for
service, it follows that the value of the experience derived
from goods is determined at time of use by customers, as
value-in-use[2]. This applies equally in an industrial setting as
goods (resources) become part of a customer’s own value
creating inputs, whether in manufacture, assembly or
distribution.
Service activity, of course, comprises a greater proportion of
GNP than goods in many countries, but this is not the
“service-dominant” meaning of Vargo and Lusch. Instead,
they seek to show that service is the undeniable core of every
marketing interaction. This is not a mainstream marketing
way of thinking but it has been emphasised by others, for
example, in services marketing by Grönroos (1990), in
relationship marketing by Christopher et al. (1991), and –
which may surprise some – in an early text by Kotler (1976).
However, Vargo and Lusch (2004a) extend their service-
centricity further. The essential points in summary are these:
. S-D logic emphasises that customers are the arbiters of
value in service interaction, either directly in interaction
with suppliers or through service interaction derived from
goods.
.
S-D logic also emphasises the potential for co-creation of
value and sharing of competencies and other knowledge
resources between customers, suppliers and other market
actors. Again, value is derived from the service experience
of the particular actors in interaction.
. S-D logic supports the notion of relationship development,
through which all kinds of communicative interaction and
co-created value might emerge over time. This forces
marketing innovation to the fore, in the sharing of new
ideas and knowledge within the firm, and between the firm
and its customers and suppliers.
.
S-D logic proposes that what a supplier firm essentially
does in its marketing activity is offer value propositions
(promises) and marshal resources together for customers.
This puts a new perspective on selling activity, marketing
communication and brand management, as will be
discussed later.
.
S-D logic requires a managerial focus on the customer
interaction processes, and attention to monitoring the
productivity and value potential of the continuous activity
flows. Rather than firms marketing to customers they
market with customers (an interaction process). The
bottom line is that marketing exchange becomes a set of
interactive episodes across time and is no longer
transaction-bound.
Overall, S-D logic has the potential to shift strategic
marketing attention away from a point-of-sale selling focus
to a service relationship focus, and in so doing, to rearrange
marketers’ notions of efficient resource allocations. Put
another way, to reveal the challenging aspect of this agenda,
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Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 363 –371
the time logic of marketing exchange becomes open-ended,
from pre-sale service interaction to post-sale value-in-use,
with the prospect of continuing, as relationships evolve
(Ballantyne and Varey, 2006).
Until quite recently, exchange in a marketing context was
synonymous with a market transaction. Under such logic,
derived from mainstream goods logic and with origins in the
neo-classical economic paradigm, any “value added” for
customers is also a cost to the firm. This linear logic has been
under constant challenge in B2B marketing and services
marketing domains due largely to the influence of relational
perspectives entering the literature over the last 20 years (see
for example, Anderson and Narus, 1990; Axelsson and
Easton, 1992; Berry, 1995; Christopher et al., 1991; Dwyer
et al., 1987; Grönroos, 1990; Gummesson, 1987; Håkansson
and Snehota, 1995).
Lusch and Vargo (2006b) have recently outlined a lexicon
of terms for the S-D logic which indicates the kind of
cognitive shift involved in rethinking the scope of marketing
action (see Table I). This is clearly a provisional list that
invites further work. For example, under S-D logic, customers
engage in buying “service solutions” to solve problems rather
than buying product benefits or features. But what if there are
no problems? Why should marketing innovation be restricted
to problem solving? Also, “promotion” is a limited form of
marketing communication. Dialogue is by far a superior way
of learning together. Both would seem to have their place as
part of a more interactive concept of integrated marketing
communications (Varey and Ballantyne, 2005).
What is absolutely clear under S-D logic is that any value
judgment at point of purchase by a customer is necessarily
provisional. Thus, the capability to perform and the reliability
of the firm become critical aspects of the firm’s value
propositions. With the function of goods seen as service
appliances, value-in-use will confirm or disconfirm these
provisional judgments. There are important implications for
branding here. We believe it works this way: The brand (as a
tangible mark) serves to signify the nature of the firm’s
promises and implicit obligations, and customers and other
stakeholders project these or any other values they see fit back
into the brand (as a socially constructed value system). This
“brand morphing” is examined in the next section.
Marks and meanings critically examined
Coverage of branding issues in the B2B literature has been
sparse (Michell et al., 2001). A natural enough tendency has
been to associate branding with fast moving consumer goods
and so branding in this domain dominates the research
picture. However, there are notable exceptions, for example
Baldauf et al. (2003), Bendixen et al. (2003) and Mudambi
et al. (1997). Yet, while brands are one of the most researched
topics in the marketing literature, ambiguity rather than
clarity of understanding has been the outcome.
Ambiguity and complexity begin with the almost universal
habit of using the single word “brand” in at least three
different marketing contexts. First, when “brand” means a
name or identifier, and second, when “brand” means a
product and its characteristics. Then there is a third and more
obtuse way of using “brand”, and that is as a symbolic
framing device for utilitarian and non-utilitarian values that
customers and others may see as attributes belonging to the
brand, as if these values were embedded characteristics of the
 Branding in B2B markets: the service-dominant logic
David Ballantyne and Robert Aitken
Table I What’s happening to marketing concepts?
Goods-dominant logic concepts Transitional concepts
Goods Services
Products Offerings
Feature/attribute Benefit
Value-added Co-production
Profit maximization Financial engineering
Price Value delivery
Equilibrium systems Dynamic systems
Supply chain Value chain
Promotion Integrated marketing communications (IMC)
To market Market to
Product orientation Market orientation
Source: Lusch and Vargo (2006b)
product (see, for example, the seminal paper by Levy, 1959;
also Lindlof, 1988; Salzer-Mörling and Strannegård, 2004).
This three-mirrored view of brands, we hope, is more
revealing as an explanation than that offered by the American
Marketing Association (AMA), who state that:
A brand is a name, term, sign, symbol, or design, or a combination of them,
intended to identify the goods and services of one seller or group of sellers
and to differentiate them from those of competitors (Kotler, 2000, p. 404).
Variants of this AMA definition occur in all major
introductory marketing texts and also in more specialist
treatments of brands and branding (see, for example, Aaker,
1991, 2004; Wilson et al., 1995).
Brands at a fundamental level certainly are marks or
symbols, the marketing purpose of which is to identify and to
differentiate one product from another, or one firm from
another. A brand, however, is much more that its brand-mark.
Any firm hopes that its stakeholders and target markets, both
customers and future prospects, will find its brand mark to be
memorable and associated with positive values about the
product or the company. However, Aaker and Joachimsthaler
(2000) comment bleakly that, within the traditional branding
model, the brand is a tactic used to drive short-term results.
Even more problematically, many firms assume that the
meanings associated with the brand mark are something they
uniquely own and control. We take the contrary view that says
suppliers and their customers and other stakeholders co-create
brand meanings, that is to say, brand meanings are socially
constructed and in the public domain. It follows that diverse
interactions, discussions and opinions generate and
regenerate any firm-based notions of brand value.
Some authors make a distinction between the firm’s brand
identity and its brand image (see, for example, De
Chernatony, 1999). We find the identity/image distinction
helpful in describing some aspects of brand thinking. The
distinction works this way: a firm’s brand identity is an
idealised set of firm-generated propositions communicated to
customers and other parties by whatever communicative
means available. This notion of brand identity is by no means
automatically accepted by target audiences because the
collective thoughts and feelings that individuals and industry
groups hold at any time about the brand-mark meanings are
ultimately of their own determination. Hence, we come to
brand image as representative of perceptions within the market
place, and beyond.
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Volume 22 · Number 6 · 2007 · 363 –371
Service-dominant logic concepts
Service
Experiences
Solution
Co-creation of value
Financial feedback/learning
Value proposition
Complex adaptive systems
Value-creation network/constellation
Dialogue
Market with
Service orientation
Any brand image in our view is essentially socially
constructed (see Berger and Luckman, 1967; Gergen, 1994;
Hackley, 1998). This means that brand image is not just the
sum of individual perceptions but a shared reality,
dynamically constructed through social interaction. If this
perspective is accepted, the meanings attached to a particular
brand are located in the minds of its customers, and the wider
community of opinion makers and stakeholders. It will likely
differ from the hoped-for perspective of the marketer or brand
manager. Also of note, the usage of the term “brand” to cover
multiple meanings is a recipe for ongoing confusion and
manipulation. In a related way, Varey and Ballantyne (2005)
have argued that advertising as the dominant form of
marketing communication declares its motives but often
conceals its methods. In the traditional logic of branding the
same applies, but here methods concealment potentially
extends to those who use them, a case of branding myopia.
So far, we hope to have shown that the logic of branding
inherited from mainstream (consumer) markets is ambiguous
at least, and we have tracked the source of confusion to the
semantics of the term “brand” itself, and to the current
paradigmatic tension over where the brand “resides”, i.e.
either in the strategic plans of the marketer or in the heads of
the users and indeed other stakeholders.
We now explore what the S-D logic of marketing means for
brands and branding, especially in a B2B context.
Branding logic seen from the perspective of S-D
logic
The analysis that follows draws from the fundamentals of the
Vargo and Lusch (2004a) thesis. However, an elaboration of
branding strategy is not specifically part of their thesis, a point
also made by Brodie et al. (2006).
S-D logic has the useful potential to shift strategic
marketing attention away from a point-of-sale selling focus
to a service and relationship development focus, and in our
view, important implications follow for branding strategy.
Under S-D logic, any brand value judgments at point of
purchase by customers are provisional, awaiting testing in
action. Service-ability (as the service capability derived from
goods) thus becomes a critical risk factor in fulfilment of the
firm’s value proposition. Put another way, brand value is
confirmed or disconfirmed in-use, at time of use, as
 Branding in B2B markets: the service-dominant logic
David Ballantyne and Robert Aitken
customers confirm or disconfirm the value proposition. As has
been discussed, the time logic of marketing exchange under S-
D logic is open-ended. The open-ended nature of brand
relationships means that individual perceptions of brand (the
meanings that become associated with a brand mark) are part
of a brand’s wider stakeholder associations, whether based on
direct first-hand experience (value-in-use), or through
indirect experience shared or circulated in communicative
interaction, media-based or otherwise.
What are the specific B2B brand management implications
of this S-D logic?
A brand-mark is a relational asset whose value to the
firm is contingent on past, present and future
interactions with various firm stakeholders
A firm rightly controls its brand-marks, which are the tangible
evidence of its brands. They also control the trademarks and
copyrights that support the brands. Brands have histories and
hopefully futures. However, marketers cannot naively assume
that they have sufficient brand power or market dominance to
control the meanings ascribed to their brands by others.
Many trade journal commentaries on brands and branding
obfuscate the identity and image meanings associated with a
brand mark. Difficulties arise when marketing managers,
without reference to product defects that will impinge on
customer value-in-use experiences or firm-to-firm
interdependencies, seek to develop marketing
communication programs to improve “brand image”. Such
split-task thinking can lead to a branding logic that pays more
attention to communicating the value proposition than
product efficacy (improving product service-ability). Both,
of course, are aspects of customer relationship development.
A brand-mark is an aid to memory
The brand-mark offers communicable evidence of the
product and past value-in-use experiences, and is an index
for customers to cognitively file such brand meanings,
especially the customer’s inferred reputation of the “brand”
(in all its variety of meanings). For example, Keller’s (1993,
2003) Customer-based brand equity (CBBE) model could be
adapted for use in a B2B environment. Defining CBBE as
“the differential effect that brand knowledge has on consumer
responses to the marketing of that brand”, he states that the
model is based on the belief that “the power of a brand lies in
what customers have learned, felt, seen and heard about the
brand as a result of their experiences over time” (Keller,
2003, p. 59).
There is a contrary point of view that says a brand-mark is
not essential to create brand meaning. For example, a “no-
name” brand is sometimes successful where the strategy is to
cultivate a trendy anonymity within a word-of-mouth
generated community of users (Ballantyne, 2004a, p. 423).
Nevertheless, the more common position is that brand-marks
serve to represent (or stand in for) the product or firm.
Only by coupling the brand-mark and product (or firm)
reputation together is it appropriate to talk of brand
meaning (the brand as a symbolic framework for
indexing meanings)
It may seem trivial to make this point but it takes social
interaction and product use together to sustain brand
meanings, unless it is argued (as many do) that the
dominant source of brand meaning is that projected by the
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firm in marketing communication (brand identity) and
accepted by target audiences (brand image). With this latter
perspective, the responsibility for the brand is assumed to
reside totally with the marketing department (Davis, 2002),
so the focus becomes more tactical and reactive than strategic
and visionary (Aaker and Joachimsthaler, 2000). This is a
difficult position to sustain in S-D logic terms as it ignores the
value-in-use derived from a product by a customer over time,
and also the word-of mouth communicative effects generated
from within brand communities (see, for example, Andersen,
2005; Muniz and O’Guinn, 2001). In our view, developing
brand image solely by traditional media message-making in a
B2B context (indeed in any context) is like trying to capture
someone’s attention by clapping with one hand.
Brand strategies can impact positively or negatively on
the strategic positioning of firms within business
networks of relationships
The concept of network positioning (Håkansson and Snehota,
1995) is not to be confused with brand positioning. The point
here is that many brand strategies develop with the customer
specifically in mind, and yet the branding implications extend
to resellers and other stakeholders. The latter group includes
employees who must fulfil the brand promises made to
customers as value propositions in S-D logic terms, and
resellers who co-create value with their customers from a
diversity of upstream sources and resources. Managing often
conflicting stakeholder requirements requires particular
coordination skills and a developed cognitive framework to
assist in the task (Payne et al., 2005).
De Chernatony (1999) has suggested that employees are
major stakeholders in brand building efforts. He suggests that
the brand should represent the vision and culture of the firm,
and this necessarily involves employees and staff in shaping
and representing a firm’s values. Corporate branding has
undergone similar shifts in emphasis to encompass employees
as stakeholders in recent years (Hatch and Schultz, 2003).
Branding is essentially a form of communicative
interaction
An important question for firms is: at what point does the
awareness of a brand and its assumed meaning actually begin?
The formulation of brand perceptions and the non-specific
nature of their timing fit closely with the S-D logic emphasis
on value and its creation, past, present and future. There is
room for an expansion of media-driven branding where
brand-marks serve to represent the firm’s product benefits and
projected values, necessarily modified by the efficacy of the
product and its value-in-use, and opinion generated by word-
of-mouth in the target markets and in the business
community at large.
A useful framework for re-focussing corporate branding
that fits with S-D logic is presented by Hatch and Schultz
(2003). In this structure, three elements are central:
1 strategic vision;
2 organisational culture; and
3 corporate image.
However, if the gap between the projected image and the
reality of the customer experience widens, customers smell
hypocrisy. Reputation matters.
 Branding in B2B markets: the service-dominant logic
David Ballantyne and Robert Aitken
The limits of advertising as a source of brand
meaning
Brand advertising is a dominant and favourite communication
medium for making branding messages in fast-moving
consumer goods (FMCG) industries. However, to the
extent that brand advertising promises are persuasive,
studies of product diffusion and communication show that
people are more inclined to act on mass-media messages if
confirmed by word-of-mouth from trusted relationship
sources (see, for example, Rogers, 1995). This does not
mean that trusted sources are always correct: it means that
they have a higher status of reliability.
Marketing communication today still basically operates as a
one-way, media-based message making system (Varey and
Ballantyne, 2005). This hegemonic message-making logic
dominates in marketing texts, and in use, notwithstanding the
emergence of more interactive perspectives represented by
integrated marketing communication (e.g. Duncan and
Moriarty, 1998; Grönroos and Lindberg-Repo, 1998).
However, even integrated marketing communication
perspectives give limited cover on how to co-create
meaning, acquire knowledge or achieve flashes of inspired
understanding.
We think it limiting to consider interaction and
communication as separate processes. Any form of
interaction between buyer and supplier acts as a source of
brand meaning, whether this is direct experience with a
product or supplier firm, or derived experiences passed on
from other users, advertising messages, and news media
including such new forms as internet weblogs.
It is possible to put communication and interaction back
together again by combining three useful and traditional
forms (see Table II). Communication can be informational,
communicational, and dialogical (Varey and Ballantyne,
2005). The informational mode includes message-making,
which has the useful intention to inform. Next, much of
integrated marketing communication’s (IMC) aspirations are
grounded in the communicational mode, where listening and
informing are key aspects of interaction. Finally, dialogue is a
process of learning together and it works in support of
innovation and the co-creation of value[3]. The purpose of
dialogue is always open-ended, learning-oriented and value-
creating (Ballantyne, 2004b; Ballantyne and Varey, 2006).
The concept of brand community fits this broadened
communicative context for creating brand meaning.
According to Muniz and O’Guinn (2001), a brand
community is a “specialised non-geographically bound
community that is based on a structured set of relationships
Table II A classification of forms of interaction
Mode of social association Underlying decision practices
Informational: persuasive Controlling and coercing
message making
Communicational: informing Ethical communication with
and being informed stakeholders
Dialogical: a bias to learning Finding a voice in co-determination
Source: Ballantyne and Varey (2006), revised from Varey and Ballantyne (2005)
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among admirers of brands” (p. 412). Brand communities
share a number of core characteristics that include shared
rituals and behaviours, and a sense of moral responsibility
between members that relates to brand values, as they see
them.
An allied concept of brand community provided by Cova
(1997) suggests that post-modern society is characterised by
tribal affiliations that function to develop a series of
communal linkages. Individuals today are not only looking
for service which enables them to be free but also something
which can link them into a community of others, as if in a
tribe (Cova, p. 311). There seems to be no reason to suppose
that this tribal logic does not to some extent also apply to
industrial buyers (remembering it was once said with
conviction that “Nobody ever got sacked for choosing
IBM”). S-D logic and its emphasis on service experience
rather more than the service promise, on co-creation of value
and mutual updating of knowledge, all make sense in this
context.
S-D logic calls for a broadening of marketing
communication modes used between exchange parties, from
informational, through communicational to dialogical. No
one modality need take precedence, but certain business
contexts and situations will call for certain communicational
responses. However, S-D logic particularly supports dialogue
as a means of learning in interaction together, in the context
of ongoing business relationships.
Conclusions
Branding under S-D logic becomes a communicative
interaction process whereby firms attempt to support the
intended meanings of their value propositions. However, we
go further and say that brand value is confirmed or
disconfirmed in use, at the time of use, as customers
confirm or disconfirm the value propositions in play. Let there
be no doubt that value propositions are essentially promises to
perform. Customers will make their most important
judgments of value received through direct service
interactions with supplier firms and on service-ability of
goods-in-use. Put another way, the time-logic of marketing
exchange is open-ended, from pre-sale service interaction to
post-sale value-in-use (Ballantyne and Varey, 2006). This
alone completely rearranges branding opportunities and
possible impacts.
S-D logic further suggests that it is the service experiences of
customers that most commonly impact on brand value,
through brand awareness and brand memory. Indeed, given
the potential longevity of brand preferences and brand
Form of “market” system
Source of value governance
Promised by selling the benefits Power inequivalence (perceived as
domination)
Co-produced by making and keeping Relational norms (perceived as
promises equitable exchanges)
Emergent in learning together: co- Networked (perceived as spontaneity)
created and integrated
 Branding in B2B markets: the service-dominant logic
David Ballantyne and Robert Aitken
memory derived from historical experience, the importance of
the service-ability of goods becomes paramount in sustaining
the life of a brand (in all meanings of the term). All product
experiences and service perceptions meld with brand
associations over time, and this helps to consolidate the
reputation of firms in both their internal (employee) and
external (customer) markets. These dynamical changes also
impact on the perceptions of the wider community of a firm’s
stakeholders.
We are confident in asserting that S-D logic opens up new
branding research opportunities. First, it will demand
renewed rigour and clarity in the use of the term “brand”,
and second, it will open up for consideration a variety of
communicative interaction modes beyond (but including)
advertising and packaging. S-D logic also gives rise to the
practical possibility of experimenting with time-based
customer contact points, and with strategies aligned more
closely to customer value-in-use assessments. Some of these
issues are not new to branding scholars but they currently
compete for attention in the shadow of media-dominant
approaches to branding. These new S-D branding
perspectives seem to us to be amenable to use in a B2B
context.
Implications for practitioners
.
Great customer service is a B2B firm’s principle branding
opportunity. This comes in two forms – direct service
interaction with a buyer company and indirect service
interaction through goods-in-use. Media advertising should
have a useful but support role in brand building in most B2B
companies.. With S-D logic, the service experience of
customers (direct or indirect) leads in varying degrees to
positive or negative trust in the supplier firm and/or its
goods and services. It follows that judgments of value-in-
use and resultant word-of-mouth effects are the primary
communicative sources of brand awareness and meaning.
Notwithstanding, media advertising over the last 50 years
has carried the weight of brand building, and still does
today. This is the conventional branding logic, even to
some extent for service brands (Berry, 2000, p. 135;
however, see also Berry and Lampo, 2004).
That said, marketing communication can play a varied
and useful support role in any service-oriented brand
development, especially in creating awareness of the
offering, stimulating trial, and providing appropriate
language and imagery to help position a brand in its
market (Berry and Lampo, 2004). But if value-in-use
(experiential) judgments are out of line with media-
mediated messages, customers will place trust in their own
experience and the word-of-mouth of trusted colleagues
and friends.
.
View brand-marks as transitional communicative devices
which over time stimulate brand recognition, reputation and
other meanings associated with the variety of interactions and
exchanges between a firm, its customers and other stakeholders.
B2B marketers in our view should always explore the full
range of branding opportunities from media messages to
explanatory brochures and distinctive packaging through
to communicative interaction in the form of trade fairs
and other forms of dialogical interaction. That said, task
capability seems to be uppermost in buyer consideration in
many industrial markets rather more than developed
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product characteristics. That is to say, buyers make
judgments about the future efficiencies, effectiveness, and
networking competencies of various suppliers (Möller and
Törröen, 2003). Also, Golfetto and Gibbert (2006) report
in their recent work on “competence-based marketing”
that they found industrial buyers selecting suppliers by
profiling and evaluating supplier resources and
competencies. This process was not limited to marketing
communication and was often initiated by a buyer in a
pre-contractual phase to align supplier competencies with
that buyer’s business processes, and later, with the
supplier and buyer experientially working together to
deliver these competencies to fit the buyer’s business
processes.
This matches well with the S-D logic and its emphasis
on communicative interaction, reciprocal servicing,
resource sharing, solution orientation and the co-
creation of value. Of special interest in the context of
this article, the assessment of brand value is a shifting
process rather than an act, and begins “upstream” with
assessments of the competencies available to the buyer
firm, backed by the reputation of the supplier firm. Any
assessment of defined tangible product characteristics
comes later again. It does seem to us that B2B buyer
behaviour strategy is more akin to a service orientation
than consumer goods. And when the appropriate focus for
branding activity is reflectively considered, it is likely as
not the B2B firm that is brand-marked, rather more than
its products.
.
Explore strategic opportunities for developing or supporting
brand communities using web-based media sites as well as call-
centres and perhaps direct marketing as appropriate to
enhancing knowledge exchange in value-in-use contexts.
Traditionally, industrial markets have not shown much
interest in developing brand communities of the consumer-
based variety, like those of Harley-Davidson and Saab
described by McAlexander et al. (2002) and Muniz and
O’Guinn (2001), respectively. However, the potential
positive impact of encouraging web-based brand
communities in industrial markets could be even greater
than in consumer markets, according to Andersen (2005),
because business and professional users may have a more
committed interest in exchanging product-related
information with the supplier company and amongst
themselves.
.
Develop a strategic branding approach contributing to the cycle
of service episodes experienced by customers. S-D logic offers
opportunities to connect with customers in new ways,
based on the specific use to which goods are put in a
buyer’s value creating processes. This could mean new
dimensions of post-sale service and logistics service
support. The concept of the cycle of service from services
marketing fits well, where the interaction process is
characterised as a sequence of episodes, moments of truth,
or critical incidents (see Albrecht, 1990; Ballantyne et al.,
1995; Carlzon, 1987; Vandermerwe, 1993).
The central S-D logic idea of goods as service
applications means that tracking the service experience
of customers over time and contributing additional service
support is an open-ended opportunity. These ideas are not
new in service industries but are less common in B2B
contexts.
 Branding in B2B markets: the service-dominant logic
David Ballantyne and Robert Aitken
.
Co-creation of value under S-D logic enhances opportunities for
co-branding. The relationship between a supplier and a
customer or another stakeholder evolves around a mutual
and reciprocal understanding of where value resides. Value
is mutual when it has benefits for all involved and
reciprocal when value is co-created. S-D logic lends itself
to all forms of value creation through co-operation, such
as through co-design, co-production, co-delivery, and
especially in the context of this article, co-branding. The
opportunity for a more integrated communication
approach is thus broadened and deepened. This in turn
supports the development of an enhanced brand image.
For example, Intel, as an industrial component provider,
has enhanced its brand image through association with
computer hardware manufacturers and assemblers, and
the highly visible placement of its brand mark on their
products.
.
A common view is that branding in consumer markets is based
on emotional appeals while branding in B2B markets is based
on logic and rationality. We recommend testing the validity of
this assumption in specific contexts. Consumer-oriented
firms (such as IBM, Apple, Coca-Cola, and Toyota) use
emotional brand appeals to differentiate and position
themselves uniquely in their markets. Such emotional ties
are thought not to exist in B2B settings. However,
understanding the emotional and cognitive interplay that
impacts on any brand image might be a matter of assessing
the degrees of emotional relevance, rather than assuming
that absolute rationality applies. It is possible to monitor
and track brand image over time in terms of performance
criteria, so we recommend firms test the validity of
assumptions about the emotional appeal of brands in
particular market contexts. The idea that emotion as a
social well-spring can be bracketed out of B2B marketing
decisions seems extreme to us, especially when B2B
marketing logic acknowledges the benefits of social
relationships as a basis for generating trust and
commitment with customers and other stakeholders.
Future directions
S-D logic encourages us to think differently about the fluidity
of brand connections between firms, their B2B customers and
stakeholders, and the excessively constrained communication
logic that may exist in B2B settings. S-D logic also asks us to
break out of the narrow role specifications of marketing
exchange and to explore the untapped potential for co-
creating brand value. Perhaps the most exciting challenge of
the S-D logic is its potential for extending the time-logic of
marketing exchange[4], beyond its still current transactional
straitjacket, in exchanges of service for service, legitimized by
a marketing logic that emphasises communicative interaction,
relationship development and the generation of knowledge
competencies adequate to serve our fast developing post-
industrial society.
Notes
1 The Otago Forum web site is available at: www.business.
otago.ac.nz/Marketing/Events/OtagoForum/
2 This emphasis on value-in-use resonates with pivotal
debates in classical economics as to the comparative utility
of goods and services. For a revealing historical account of
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the development of economic thought around these
themes, see Vargo and Morgan (2005). Tangible goods
of course won out as the dominant logic. See also an earlier
historical review by Ramirez (1998) which emphasises a
value co-production framework at variance with that
commonly associated with industrial production.
3 Dialogue is not given any depth of treatment in the
original S-D logic thesis, although there are supportive
references (Vargo and Lusch, 2004a, pp. 13-14). For a
fuller treatment of the application of dialogue in various
marketing contexts, see Ballantyne (2004a, b), Varey
(2002), and Varey and Ballantyne (2005).
4 For a perceptive commentary on how marketing
interaction works in time, see Medlin (2004).
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marketing myths: remnants of a goods-based
manufacturing model”, Journal of Service Research, Vol. 6
No. 4, pp. 324-35.
Vargo, S.L. and Morgan, F.W. (2005), “Services in society
and academic thought: an historical analysis”, Journal of
Macromarketing, Vol. 25 No. 1, pp. 42-53.
Wilson, R.M.S., Gilligan, C. and Pearson, D.J. (1995),
Strategic Marketing Management, Butterworth-Heinemann,
Oxford.
Further reading
Christopher, M., Payne, A. and Ballantyne, D. (2002),
Relationship Marketing: Creating Stakeholder Value, 2nd ed.,
Butterworth-Heinemann, Oxford.
Dixon, N. (1998), Dialogue at Work, Lemos and Crane,
London.
Gummesson, E. (2002), Total Relationship Marketing, 2nd ed.,
Butterworth-Heinemann, Oxford.
Nonaka, I. and Takeuchi, H. (1995), The Knowledge Creating
Company: How Japanese Companies Create the Dynamics of
Innovation, Oxford University Press, New York, NY.
Storbacka, K. and Lehtinen, J.R. (2001), Customer
Relationship Management: Creating Competitive Advantage
through Win-win Relationship Strategies, McGraw-Hill,
Singapore.
To purchase reprints of this article please e-mail: reprints@emeraldinsight.com
Or visit our web site for further details: www.emeraldinsight.com/reprints
371
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 363 –371
Wikstrom, S. and Normann, R. (Eds) (1994), Knowledge and
Value: A New Perspective on Corporate Transformation,
Routledge, London.
About the authors
David Ballantyne is an Associate Professor of Marketing at
the University of Otago in New Zealand and an International
Fellow at the Centre for Relationship Marketing and Service
Management, Hanken Swedish School of Economics in
Helsinki. He was convener of the first wide-ranging
international dialogue on S-D logic, The Otago Forum,
held at the University of Otago in November, 2005. He is also
a co-author with Martin Christopher and Adrian Payne of
Relationship Marketing: Bringing Quality, Customer Service and
Marketing Together (1991), the first text published
internationally in this field of marketing inquiry. A second
edition was published in 2002 as Relationship Marketing:
Creating Stakeholder Value. David Ballantyne is the
corresponding author and can be contacted at:
dballantyne@business.otago.ac.nz
Robert Aitken is a Lecturer in the Department of
Marketing at the University of Otago. His academic and
research interests include advertising, consumer behaviour,
teaching and learning, communications and the media. He is
lead author of the Marketing Theory 2006 special issue
“Service-dominant logic of marketing: insights from The
Otago Forum”. He is a constructivist who is interested in how
people make sense of the world and an idealist in wanting to
know how we can make it a better place.
Branding implications of partner firm-focal firm
relationships in business-to-business service
networks
Felicia Morgan, Dawn Deeter-Schmelz and Christopher R. Moberg
Ohio University, Athens, Ohio, USA

Abstract
Purpose – By outsourcing or partnering with two or more firms to perform certain activities targeted toward customers, firms are engaging in service
networks. This research begins to examine how customers evaluate firms in a strategic, B2B service network and how their assessment of firms
involved in co-producing after-sales service affects their evaluations of a focal selling firm. These evaluations include the key relational outcomes of
brand image, satisfaction, and behavioral intentions.
Design/methodology/approach – The conceptual model examines the effects of partner firm performance on customers’ evaluations of a focal
selling firm. Key factors such as focal brand strength and the strength of the relationship between the partner firm and the focal selling firm are
proposed to influence this relationship.
Findings – Post-sale business services provided directly to the customer are likely to play an important role in building a firm’s brand image and equity,
whether those services are provided by the firm or its partners.
Research limitations/implications – The individual firm to individual customer dyad approach that currently dominates the literature does not
adequately capture the complex nature of today’s B2B service relationships. This research develops a conceptual model that directly addresses the way
customers evaluate service when it is performed by multiple partners.
Practical implications – Discovering how customers evaluate service experiences in which multiple firms co-produce the service within a B2B service
network can provide firms with the guidance needed to improve the performance of the entire network and the overall service experience of network
customers.
Originality/value – This paper presents new theoretical developments in the area of business-to-business service networks. This research also
addresses several gaps in the industrial marketing literature, particularly B2B services and branding.

Keywords Service industries, Networking, Business-to-business marketing, Brands

Paper type Research paper

An executive summary for managers and executive
readers can be found at the end of this issue.
Introduction
One important recent development in the marketing literature
has been the application of the network paradigm to the study
of service provider relationships with customers. Because
service providers often work with other firms to meet the ever-
increasing expectations of customers, the complexity of
relationships is increasing. Utilizing the individual firm to
individual customer dyad approach that currently dominates
the literature does not adequately capture the complex nature
of today’s service relationships. Researchers need to examine
the relationship between customers and “service networks”,
where two or more entities jointly provide a service experience
to a customer, for two main reasons. First, discovering how
customers evaluate service experiences in which multiple
firms co-produce the service can provide firms with the
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0885-8624.htm
Journal of Business & Industrial Marketing
22/6 (2007) 372– 382
q Emerald Group Publishing Limited [ISSN 0885-8624]
[DOI 10.1108/08858620710780136]
guidance needed to improve the performance of the entire
network and the overall service experience of network
customers (Morgan and Tax, 2004; Morgan, 2004).
Second, consumers’ perceptions of services co-produced by
multiple providers can have important branding implications,
for service delivered by a third party can affect the brand
strength and/or image of the focal firm (Ahluwalia et al., 2000;
Dube and Maute, 1998; Simonin and Ruth, 1998).
Early research on service networks has focused on business-
to-consumer (B2C) relationships. For example, Morgan
(2004) examined how consumers evaluated service providers
involved in having a car repaired after a minor accident. In that
study, the service network consisted of a focal firm (an
automobile insurance company), and two partner firms, (a
repair shop and a rental car firm). Morgan’s study (2004)
strongly suggests that, in service network contexts, partner firm
performance is a key influence on consumer evaluations of the
focal firm, including the focal firm’s brand strength and image.
Specifically, the results indicated that partner firm
performance, the strength of the focal brand (the insurance
company), and the perceived strength of the relationships
between the focal firm and its partner firms all significantly
influence consumers’ evaluations of the focal brand’s image
during a service network experience.
While examining consumer evaluations of service networks
is valuable, there are business-to-business (B2B) contexts
where service networks are common, even when tangible

372
 Branding implications of partner firm-focal firm relationships
Felicia Morgan et al.
goods are sold. We argue that critical differences between
B2C and B2B service networks exist. Consider, for example, a
customer purchasing a computer. In a B2C context a
consumer may interact one-on-one with a provider such as
Dell to purchase a single computer. Subsequent interactions
with third-party providers might include a shipping firm such
as UPS and after-sales service. Alternatively, in a B2B
environment the process is more complex. The selling firm
may work with multiple members of a buying center rather
than a single customer. Once a buyer and seller have entered
into an arrangement, customer satisfaction largely depends on
the service provided after the purchase or during the term of
the contract. Much of the B2B buyer’s evaluation will be
related to logistics and customer service activities such as
warehousing, order fulfillment, order tracking, delivering the
right product at the right time, smooth installation, and
accurate billing (Dwyer and Tanner, 2002; Moberg and Speh,
2004; Rogers and Daugherty, 1995; Sheffi, 1990). Product
support in the forms of general service, warranties, provision
of spare parts, expert assistance, online assistance, and field
service is also more critical in a B2B environment in which
customers are dependent on suppliers to deliver the services
needed to operate (Kumar and Kumar, 2004). The increased
complexity of this process highlights time as a potential
difference between B2C and B2B, i.e. the total time for
delivering a co-produced B2B service is likely to be longer
than that for delivering a co-produced service in a consumer
setting. Given these key differences, we argue that research
examining B2B service networks is warranted.
The previous review highlights the practical differences
between service networks in B2C versus B2B settings.
However, these are not the only differences worth exploring;
key theoretical differences may also exist. For consumers, the
notion of network coheres around an “experience”. The
primary question is whether the service network experience
will cohere in a B2B context: will the buying firm perceive the
network as a whole and interpret the co-produced service as a
single process representative of a single brand? Or will the
industrial buying firm recognize outsourced processes as
representative of separate brands? One can imagine a situation
in which a retailer purchases a manufacturer’s product from a
distributor and receives that product from a third-party
transportation firm. Does the retail buyer interpret this
purchase as an experience or as a series of separate activities
provided by separate firms? Research examining these ideas is
needed to assist manufacturers as they build relationships
with partner firms and develop and implement branding
strategies. The dearth of studies exploring branding from an
industrial marketing perspective underscores the need for
theoretical development in this area (Lynch and de
Chernatony, 2004).
Based on the scarcity of research on service networks and the
need to examine the impact of service networks on customer-
firm relationships, including branding implications, the major
goal of this research is to conceptualize how customers evaluate
firms in a B2B service network and how their assessment of the
firms co-producing the after-sales service affects their
evaluation of the focal (selling) firm. In the following sections
we discuss service networks, service processes and experiences,
and the role of brand image in a service network. Next, we
explore service networks and branding in a B2B context and
offer research propositions. We end with a discussion of
implications for researchers and practitioners.
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Conceptual perspectives
Service networks
The seminal concepts that form the very core of services
marketing are all dyadic in nature: the service encounter
(Shostack, 1985), service quality (e.g. Parasuraman et al.,
1985), service recovery (Tax et al., 1998). Yet in many
instances customers do not interact with individual firms in
isolation. Rather, for any given situation, the process and
outcomes of customer interactions with a service or company
may be shaped by multiple entities. Ever-increasing
specialization, or microspecialization, in the marketplace is
creating interdependence among providers, collaborators, and
customers and more indirect forms of exchange (Vargo and
Lusch, 2004). The evolution of service provision toward
multiple providers calls for transitioning from the traditional
focus on the customer-firm dyad to a focus on service
networks. Further, while all firms must learn to manage their
network relationships, firms that outsource customer-contact
activities to network partners face the challenge of managing
customer relationships “once-removed”. An important yet
overlooked issue in services marketing is the assessment of the
reciprocal impact of the performance of members of a service
network on customer relationships with and evaluations of
each firm within a network (Morgan and Tax, 2004). Some
researchers have made inroads into developing conceptual
frameworks and theories to promote a better understanding of
networks (cf. Ritter and Gemunden, 2003), yet with few
exceptions (e.g. Gittell, 2002; Singh, 1991), we have not
addressed the way customers evaluate a service when it is
performed by multiple partners.
The service network has been defined as “two or more
entities connected formally or informally which directly
provide a range of resources and activities that create value
and help customers solve short- or long-term problems”
(Morgan and Tax, 2004). The keys to this definition are:
.
each entity in the network performs service activities that
work in combination with other firms’ service activities;
and
.
each entity in the network interacts directly with
customers.
We focus on direct interactions with customers because many
services are produced and consumed at the same time. The
quality of service and customer evaluations are dependent on
what happens in “real time” when service-producing
employees play a role as part of the product itself and as an
essential ingredient of the experience for the customer
(Zeithaml and Bitner, 2003).
Service networks can take on a variety of structural forms;
however, because we are exploring the effects of partner
performance on customer evaluations of a focal firm within a
service network, the issue of centrality is of primary interest.
Centrality refers to the occupation of a centrally positioned
and powerful node within the network with linkages to all
other network members (cf. Brass and Burkhardt, 1992).
Centrality is most evident in “firm-centric networks” (cf.
Brass and Burkhardt, 1992) that may be of a “fan-” or “star-
shaped” structure and are comprised of a focal firm, all the
firms to which it is connected, and the interconnections
thereby implied. Jarillo (1988) conceptualized a network with
such a “hub firm” that sets up the network and takes a pro-
active stance in the care of it as a strategic network. This type of
network is the focus of this paper. An example of a strategic
 Branding implications of partner firm-focal firm relationships
Felicia Morgan et al.
B2B service network is shown in Figure 1. The solid lines in
Figure 1 indicate that the focal firm has a relationship with
each of the partner firms; the dotted lines are representative of
direct customer contact.
Service processes and experiences
The service delivery process has been studied in terms of
discrete units of analysis, usually based upon the number and
scope of interactions (Grönroos, 2000). There is a general
understanding of these concepts; however, terminology has
not been consistent in the literature. In the interests of clarity,
we refer to the smallest unit of analysis in the interaction
process as an “encounter”, or a single customer contact with a
service provider. A typical B2C encounter is dropping clothes
off at the cleaners; accepting a delivery of new equipment is
representative of a B2B encounter. An “episode” is a series of
related encounters (e.g. Liljander and Strandvik, 1995) and is
associated with the firm level of analysis. Examples include
dinner at a restaurant (B2C) and hosting an employee
training session (B2B).
An “experience” consists of all service encounters and
episodes related within a common time period, project, event,
or combination of these (Grönroos, 2000). An example of a
B2C experience is a night on the town, including episodes of
riding in a taxi, dining at a restaurant, and attending the
theater. A B2B service experience might entail the entire
process of procuring a new database management software
package, including episodes of ordering, delivery, installation,
training, and maintenance. It is important to note that
ultimately, the boundaries of an experience are subject to the
interpretation of the customer – that is, the experience starts
and ends when the customer perceives it does. According to
Figure 1 Strategic or “firm-centric” business-to-business service
network
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Padgett and Allen (1997, p. 52), a service experience is a
“time-bounded progression of events beginning with the
identification of service consumption as a distinct situation
and ending with the resolution of the situation”. They suggest
that an experience begins when the consumer defines a
situation in response to a given need and begins activity (i.e.
thoughts, feelings, and behaviors) related to addressing the
need. The experience concludes when the functional and
emotional outcomes of the service are realized. Pragmatically,
we can assume logical starting and ending points of an
experience for many everyday services, but without asking
each customer specifically, we are confined to the limitations
of the assumption. Thus, when examining service network
experiences (as was the case in Morgan, 2004), a key implicit
hypothesis is that the customer perceives the network as a
whole and interprets the service co-production by multiple
members as a single process, under the aegis of the focal
brand. Although Morgan (2004) found support for this
hypothesis in a B2C context, it remains to be seen whether
the holistic service network “experience” will remain a viable
unit of analysis in a B2B setting.
Brand image in a service network context
A brand is a multidimensional construct linking the value-
creating activities of suppliers with perceptions in customers’
minds (de Chernatony and Dall’Olmo Riley, 1999). For
branding strategies to be successful, and brand equity to be
created, customers must perceive that there are meaningful
differences among brands in the product or service category.
Establishing a high level of brand awareness and positive
brand image in memory produces the knowledge structures
that can affect the customer response and produce customer-
based brand equity (Keller, 1998). The strength, favorability,
and uniqueness of the associations that comprise brand image
play a critical role in determining the customer response
differential. Thus, it is brand image that is primarily
responsible for brand differentiation.
Service brand image is the customer’s “mental picture of
the brand created in response to brand related stimuli”
(Padgett and Allen, 1997, p. 50). Because of the intangible
nature of services, building and managing service brand image
requires an understanding of how customers make sense of
services, or create and attach self-relevant meanings to service
experiences. There are more points at which customers
interact with services brands (versus goods brands) and the
experience is more strongly influenced by employees (e.g.
Burmann and Zeplin, 2005), which can result in greater
variability. An important goal for brand managers is to achieve
brand differentiation while maintaining a consistent brand
experience across “brand touchpoints”. A “brand
touchpoint”, also known as a “brand contact”, is defined as
any information-bearing experience that a customer or
stakeholder has with a brand (Schultz et al., 1993). Brand
touchpoints include the company’s controlled
communications of the brand’s purpose and identity, the
core elements of the brand such as logos, symbols, and
advertising tag lines (i.e. the “presented brand”; Berry, 2000),
encounters with service-producing employees of the firm, and
external brand information essentially uncontrolled by the
company, including word of mouth messages (Schultz et al.,
1993) and the behaviors of distributors and agents (Duncan
and Moriarty, 1998). Because a brand is essentially the sum of
its touchpoints, direct and indirect, explicit and hidden
 Branding implications of partner firm-focal firm relationships
Felicia Morgan et al.
communication dimensions must all be recognized and
accounted for by managers in order to achieve a consistent
brand message (e.g. de Chernatony and Dall’Olmo Riley,
1999, Duncan and Moriarty, 1998). However, this task takes
on new levels of complexity when critical service components
are delivered by employees of network partners, or in other
words, are outsourced (Burmann and Zeplin, 2005).
An increasing number of researchers and practitioners seem
to agree that it is at least as important for the employees of an
organization to understand the concept and values associated
with the brand as it is for customers (e.g. Berry, 2000; Ind,
2003; Mitchell, 2002). For service organizations, internal
branding, or the process of gaining employees’ intellectual and
emotional buy-in to the brand, is an especially relevant means
of driving brand and business performance (Thompson et al.,
1999). This is primarily due to the fact that for many services,
it is employees who create the brand experience for
customers. According to Berry (2000), the primary source
of brand meaning for customers who have actually
experienced a service is the experience itself. Thus, the
brand is created and recreated for customers at every service
encounter. Because the customer-brand experience is driven
by all employees who contribute to the brand’s products,
services, and communications, all employees need to be
familiar with the company’s presented brand concepts and
strategies, and be committed to “live” the brand both inside
the organization and out (Burmann and Zeplin, 2005).
However, Berry (2000) emphasizes that for services firms,
customer-contact personnel are the primary medium through
which brand image and equity are built; thus, without a
connection to and understanding of the brand, these
employees can most easily undermine advertising-driven
expectations with inappropriate words or behavior (Mitchell,
2002). Contact employees can make the brand come alive
only by representing the beliefs, attitudes, and behaviors
associated with the brand in such a way that customers
perceive a consistent message across the whole range of
services provided (de Chernatony and Dall’Olmo Riley,
1999). Berry and Parasuraman (1991, p. 129) recommend
that firms adopt the practice of internalizing the brand, which
involves “explaining and selling the brand to employees [. . .]
training employees in brand-strengthening behaviors [. . .]
rewarding and celebrating employees whose actions support
the brand”.
Although we may conclude that customer-contact
employees are the primary medium through which service
brand image and equity are built (Berry, 2000), and thus
internal branding is especially critical for services firms, it is
inherently difficult to apply “internal” branding philosophies
and tactics to service experiences that span two or more
organizations. When important components of a total service
experience are delivered by the employees of another firm,
how can the objectives of internal branding – namely the
intellectual and emotional buy-in of employees – be achieved?
There are implications for selecting, managing, and
maintaining relationships with service network partners that
have similar cultures and a willingness to cooperate and
coordinate activities toward achievement of superordinate, or
network goals (Bucklin and Sengupta, 1993). Because of the
intrinsically difficult nature of managing the activities of
service providers not under the organization’s direct control,
the service network context represents unique challenges for
managers. A service organization must not only be aware of
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the potential effects of network partner activities on the
organization’s own brand image, the organization must
manage and attempt to leverage these effects to ensure
brand differentiation among competitors and consistent and
favorable service brand image in customers’ minds.
B2B service networks and branding
A review of the services literature reveals that research on
service networks is in its infancy and focuses on the impact of
service networks on customer perceptions only in traditional
B2C environments (e.g. Morgan, 2004; Morgan and Tax,
2004). In the B2B and industrial marketing literature, the
increasing existence and importance of networks to business
marketers has been recognized (e.g. Gummesson, 2004;
Coviello et al., 1997). However, much of the research on
critical B2B concepts and theories, such as customer
relationship management and supply chain management,
ignores the network perspective and continues to focus on
customer-supplier dyads (e.g. Gummesson, 2004; Moberg
et al., 2003). The proposed examination of the branding
impact of service networks on focal firms in B2B
environments can add to both the services and B2B
literature domains because it considers simultaneously the
potential effects of the multiple brand relationships within the
network, rather than adopts a dyadic perspective.
While research on branding in B2B service networks is
lacking, researchers have begun to examine service quality,
customer evaluations of service, and branding from an
industrial perspective. Bolton et al. (2003) have taken an
important first step in studying customer service evaluations
by business customers, finding that both the functional and
technical qualities of service delivery influenced business
customer evaluations. In another study, van Birgelen et al.
(2002) used a sample of international customers of a
multinational office equipment manager to study the effects
of national culture characteristics on buyers’ evaluations of
face-to-face versus technology-infused service delivery. Lin
et al. (2005) conducted an in-depth investigation of the
service quality of after-sales service information in the
Taiwanese machine tool industry, albeit from the
manufacturers’ perspective. These studies, along with
several others, highlight a key point: the competitive
advantage for most B2B firms lies in the added value
associated with superior service rather than in the elements of
the marketing mix (Bolton et al., 2003; Donath, 2001; Lele
and Sheth, 1987; Loomba, 1998). Good service drives
customer satisfaction, promotes customer loyalty, and thus is
a key defensive marketing strategy (Berry, 1995). Indeed,
research has provided evidence of a link between service and
the long-term financial performance of industrial service firms
(Kumar, 1999). Still, little is known about the influence of
service on the satisfaction and loyalty behaviors of business
customers.
Although in recent years more attention has been focused
on B2B branding, it nevertheless represents another under-
researched construct in the industrial marketing literature
(Lynch and de Chernatony, 2004). Yet industrial firms
increasingly are turning to branding to differentiate their
products and/or services (Shipley and Howard, 1993). As
argued by Lynch and de Chernatony (2004), the clusters of
functional and emotional values that comprise a brand
promise the buyer a unique, positive experience, whether that
buyer be operating in a B2B or B2C environment. In support
 Branding implications of partner firm-focal firm relationships
Felicia Morgan et al.
of this premise, Mudambi (2002) found that industrial buyers
consider branding in their purchase decision, although the
importance of branding varies by buyer and purchase
situation. Sweeney (2002) reported that business brands
played a critical influencing role during four stages of the
purchasing decision process, including the development of the
supplier list, the shortlist of firms for negotiation, signing the
purchase agreement, and deciding on supply and support
services. These findings suggest that branding can play an
important role in the B2B purchasing process.
Some researchers have argued that B2B brands go further
than B2C brands by creating ties with other stakeholders,
including channel intermediaries and employees, as well as
customers (Lynch and de Chernatony, 2004; APQC
International Benchmarking Clearinghouse, 2001). In
essence, the brand is the sum of all customer interactions
with the company, which in the industrial environment can
include billing, promotions, salespeople, product
demonstrations, trade shows, as well as after-sales support
services (Smith, 2004). Importantly, these interactions
between the customer and the firm are equivalent to the
brand touchpoints discussed previously. By outsourcing or
partnering with two or more firms to perform certain activities
targeted toward customers, B2B firms are engaging in service
networks.
Proposed model
The fundamental premise of this study is that customers’
experiences with partner firms within a strategic B2B service
network will affect their evaluations of the focal firm. This is
the main relationship of interest in this study and it is depicted
in Figure 2 with a horizontal arrow from the independent
variable (i.e. partner firm performance), to the dependent
variable (i.e. customer evaluations of focal firm). These
customer evaluations include key relational outcomes such as
the brand image of the focal firm (i.e. brand meaning; Berry,
2000), satisfaction with the focal firm, and behavioral
intentions toward the focal firm. Because customer
perspectives on networked organizations have been scarcely
Figure 2 Proposed model
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studied, we have chosen to focus primarily on the
independent variable (i.e. partner firm performance) and its
relationship with customer evaluations of the focal firm. For
the purposes of this study, we consider other variables only in
their capacity as moderators of this relationship. The other
variables of interest are the key factors proposed to influence
the manner in which experiences with partner firms in the
network affect customer evaluations of the focal firm. These
situational or “context” factors include the strength of the
relationship between the focal firm and the customer, focal
brand strength, the importance or “criticality” of the partner’s
service within a particular service network context, and the
strength of the relationship between the focal firm and the
partner firm. Two of these variables – focal brand strength
and focal firm-partner firm relationship strength – have been
shown to influence the extent to which partner episodes
impact a focal firm’s brand image in a consumer setting
(Morgan, 2004).
A moderator-oriented approach to this research is
appropriate for several reasons. First, according to Baron
and Kenny (1986), moderator research is typical when there
is a strong focus on a particular predictor variable. Our
primary interest is in developing theory relevant to the
independent variable, partner firm performance, and its
effects on customer evaluations of the focal firm. Second,
although the potential for mediation exists among some of the
variables in the proposed model, this remains an empirical
issue for future study; at this stage, the independent variable,
partner firm performance, is not conceptualized as causally
antecedent to any of the other exogenous variables. Finally,
the relationship between partner firm performance and
customer evaluations of the focal firm has potentially critical
managerial implications for the focal firm, but of course, the
focal firm has little control over partner actions. Thus,
information about actionable (i.e. controllable) factors
moderating this relationship will be of high value to
practitioners and managers who are actively engaged in
partnerships and service network alliances.
 Branding implications of partner firm-focal firm relationships
Felicia Morgan et al.
Research propositions
Partner performance
Proposition one reflects the fundamental premise of this
paper: the actions of partner firms in the service network will
affect customer evaluations of the focal firm. Firms within a
service network co-produce the service experience for the
customer. In so doing, these firms effectively create (implicitly
or explicitly) co-branded services, establishing “experiential”
brand alliances in the presence of their customers. Brand
alliances involve the long- or short-term association or
combination of two or more individual brands (Rao and
Ruekert, 1994) that may be represented physically (e.g. a
bundled package of branded products) or symbolically (e.g.
advertisements, documents, signage) and are subject to the
context effects of proximate cues (Simonin and Ruth, 1998).
These proximate cues may come from either marketer-
controlled sources or secondary sources (Keller, 1998).
Marketer-controlled sources include tangible evidence within
the servicescape such as documents, signage, and equipment
(Bitner, 1992) and verbal information from service providers
(Keller, 1998). Secondary sources include other individuals,
organizations, places, and events (Keller, 1998). Simonin and
Ruth (1998) demonstrated that brand alliances create
spillover effects to the equity of the core brands. These
effects arise from customer perceptions of the nature of the
associations and “fit” between the brands.
Morgan’s (2004) study demonstrated a similar effect in a
consumer service network: the brands presented together in
the network formed an experiential alliance that customers
evaluated in much the same manner as the de facto brand
alliances studied by Simonin and Ruth (1998). Morgan
(2004) found that any levels of association within the service
network – i.e. any perception on the part of customers that
the firms were part of the same service process or experience
– will create significant feedback effects to the focal brand. In
that study, the effects took the form of an improvement or
decline of brand image.
According to Berry’s (2000) services branding model, it is
the customer’s experience with the firm that has the most
influence on the firm’s brand image. The presented brand and
external brand communications influence brand image to a
much lesser degree. Morgan’s (2004) empirical findings
suggest that not only is this true, but the influence on brand
image extends to experiences with partner firms that the
customer associates with the focal firm. This suggests that
even a firm with a strong presented brand and favorable
external communications cannot maintain a favorable brand
image unless the customer’s experiences with the firm – and
its partners – continue to be positive.
It is expected that the partner firm’s performance will affect
other relational outcomes such as satisfaction with and
behavioral intentions toward the focal firm. Customer
satisfaction is an overall post-purchase evaluation, the
customer’s fulfillment response (Oliver, 1997). The most
widely used model within the customer satisfaction literature
is the disconfirmation of expectations paradigm (e.g. Oliver,
1997; Oliver and Bearden, 1985). This paradigm holds that
customers compare perceived product and service
performance to expectations and that satisfaction is a
function of the discrepancy between perceived performance
and expectations. Performance that exceeds expectations is
positively disconfirmed, performance that meets expectations
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Volume 22 · Number 6 · 2007 · 372 –382
is confirmed, and performance that falls short of expectations
is negatively disconfirmed. The more positive the
disconfirmation, the greater the satisfaction. Within this
model, perceived performance has been shown to be a strong
determinant of satisfaction evaluations (e.g. Cadotte et al.,
1987; Gupta and Stewart, 1996; Tse and Wilton, 1988).
Perceived performance has been conceptualized as a
composite of attributes or benefits received. In a service
network context, customers “receive” these benefits directly
from a partner firm which, from the customer’s viewpoint,
performs as an extension of the focal firm. Thus, the partner
firm’s performance will be a key determinant of the
customer’s satisfaction with the focal firm.
Finally, both satisfaction and brand image have each been
positively associated with customer loyalty (e.g. Bolton et al.,
2003; Oliver, 1997) and we expect that these relationships
will also hold within the B2B service network context.
P1. The network partner’s performance will have direct
and positive effects on customer evaluations of the
focal firm.
Focal brand strength
Associations resulting from customers’ prior first-hand
experiences with service network brands, whether within the
network or elsewhere, will be a significant source of
information (Berry, 2000). If a focal brand is strong,
customers will extend concomitant favorable and unique
associations to other brands and firms to which it is perceived
to be connected (Simonin and Ruth, 1998). According to
Aaker (1996), a signal of brand strength is the brand’s
resilience in the face of misfortune. Stronger brand beliefs and
attitudes are more resistant to negative information and
customer loyalty and commitment enable a strong brand to
better withstand any relationship transgressions that
customers ascribe to the company or the brand itself
(Ahluwalia et al., 2000; Dube and Maute, 1998). Hogarth
and Einhorn (1992) note that as information accumulates and
as people become more firmly committed to their beliefs,
sensitivity to new information declines. A strong brand
implies strongly held brand beliefs, strong brand equity, and
more pieces of accumulated information. Additional pieces of
“information” gleaned by the customer – i.e. brand
knowledge obtained via an experience with a service
network partner brand – represent a smaller percentage of
the customer’s brand image knowledge structure, and will
therefore cause little or no brand belief updating to occur for a
strong brand (see also Petty and Cacioppo, 1986). Within the
service network context, then, it is reasonable to expect that
the stronger the focal brand, the more resilient it will be to the
effects of partner brand episodes on customer evaluations of
its brand image. Weak focal brands will be more subject to
feedback effects from partner performance.
Brand names function not only as associative cues, but also
as predictive cues of product performance (Janiszewski and
Van Osselaer, 2000; Keller, 1998). In a rare empirical study of
customer evaluations of a complex service (packaged tours),
Andreassen and Lindestad (1998) demonstrated that a firm’s
image is a strong predictor of customer satisfaction and
loyalty. A strong brand presents a strong promise, setting up
higher expectations on the part of customers. Prior research
has demonstrated that brand expectations are a key factor in
customer satisfaction evaluations (cf. Cadotte et al., 1987;
 Branding implications of partner firm-focal firm relationships
Felicia Morgan et al.
Gupta and Stewart, 1996; Tse and Wilton, 1988). We
propose that the customer’s expectations of a focal firm as
developed through the presented brand and/or direct
experience will extend to those partners the focal firm has
“charged” with co-providing its services.
P2. The focal firm’s brand strength will moderate the
effects of partner firm performance on customer
evaluations of the focal firm.
Focal firm-partner linkage strength
Simonin and Ruth (1998) found that brand alliances of
different types significantly affect the respective partnering
brands. The strength of the association between brands in a
brand alliance impacts customer evaluations of the
composite, or whole, as well as the individual brands
(Simonin and Ruth, 1998). In a B2B service network,
customer perceptions of the strength of the association
between the partner firm(s) and the focal firm may be
influenced by the type of relationship (i.e. contractual,
agency) and/or the level of interdependency. In the brand
alliance literature, Rodrigue and Biswas (2004) found that
complementary partner firm capabilities and the presence of
a contractual relationship with the focal firm (i.e. a strong
association) impacted consumer attitudes toward the alliance
and the core brands. Other sources of information for
customers as to the strength of the partner firm-focal firm
relationship may include conflict handling, level of
interdependence, and quality of information exchange
(Wiertz et al., 2004). Wiertz et al.’s (2004) study suggests
that within a multi-channel service system, high levels of
these dimensions are positively related to optimal levels of
customer service. Thus, the more members of the service
network are perceived to cooperate, the more likely
customers will perceive them as strongly linked. As with
previous findings from the brand alliance (e.g. Simonin and
Ruth, 1998) and (nascent) service network domains
(Morgan, 2004), the stronger the customer-perceived links
between brands, the greater the spillover effects to the core
brands. In the service network, episodes with partners that
have strong linkages to the focal brand will have a stronger
impact on focal brand image than episodes with weak
linkages.
P3. Focal firm-partner firm relationship strength will
moderate the effects of partner firm performance on
customer evaluations of the focal firm.
Focal firm-customer relationship strength
The behavior of entities is often moderated by context.
Business markets are domains in which buying and selling
companies interact; the interaction takes place within the
context of a relationship. Supplier-customer relationships in
B2B markets evolve over time and, with mutual investment,
often increase in value (Turnbull et al., 1996). Such
relationships may be characterized by increasing mutual
adaptation and increasing commitment (Ford, 1982).
Concomitantly, this interactivity may be expected to lead to
stronger bonds of loyalty between the relational parties
(Turnbull et al., 1996). The marketing literature suggests that
the nature and strength of B2B relationships should moderate
the effects of firm performance on customers’ evaluations and
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Volume 22 · Number 6 · 2007 · 372 –382
behavioral intentions (e.g. Bendapudi and Berry, 1997; Dwyer
et al., 1987). While most support of such effects is conceptual
in nature, emerging empirical evidence suggests they are likely
to occur. For example, a recent study by Bolton et al. (2003)
strongly supports the notion that relationship characteristics
such as nature and duration moderate the effect of firm
performance on customer evaluations. Boulding et al. (1999)
show that as customers gain experience in evaluating a service
over time, they change their evaluation strategies, weighing
prior opinions more heavily than new information (see also
Hogarth and Einhorn, 1992). Thus, a strong and long-
standing relationship between a focal firm and a given
customer may better situate the focal firm to withstand any
repercussions arising from a partner firm’s service failures or
transgressions during contact with that customer.
P4. Focal firm-customer relationship strength will
moderate the effects of partner performance on
customer evaluations of the focal firm.
Importance of partner service
The marketing literature suggests that although every service
encounter is important, some are more “critical” than others
and contribute more to customer satisfaction or
dissatisfaction (cf. Bitner et al., 1990). The term “core
service” has been used to describe the bundle of services or
products that companies must produce to fulfill the needs of
customers or target markets. Within a B2B service network,
certain after-sales support activities such as installation of
equipment or the operation of a call center may be considered
more “core” than billing or other administrative tasks.
Regardless of who performs these services, these core
activities are likely to weigh more in overall evaluations of
the service, the network, and the focal firm. Core services
performed by partners will be subject to no less scrutiny than
core services performed by the focal firm itself. In accord with
this line of thinking, a study by Leuthehesser and Kholi
(1995) suggests that buyers are likely to place greater
emphasis on interactions with suppliers when the stakes are
relatively high. From the buyer’s perspective, the stake in a
relationship with a particular supplier tends to be higher when
the product or service being purchased is relatively more
important. It is reasonable to expect that customers of a
service network will weigh those “core” or more important
service components more heavily than other, more peripheral
activities. Thus, the more important the service provided by
the partner, the more it will create feedback effects to the focal
firm.
P5. The importance of the service provided by the partner
will moderate the effects of partner performance on
customer evaluations of the focal firm.
Discussion
The primary contribution of this study is the development of
a model of the potential effects of partner firm performance
on customers’ evaluations of the focal firm in a B2B
environment. We have proposed that the network partner’s
performance will have a direct and positive effect on customer
evaluations of the focal firm. We have further proposed that
this relationship will be moderated by:
 Branding implications of partner firm-focal firm relationships
Felicia Morgan et al.
.
the focal firm’s brand strength;
.
the focal firm-partner firm’s relationship strength;
. the focal firm-customer relationship strength; and
.
the importance of the service provided by the partner
firm.
In developing this model we have addressed several gaps in
the literature, including the lack of research on B2B services
and B2B branding. In addition, by testing this model of
service networks in a B2B context, we are extending the work
of Morgan and Tax (2004) and Morgan (2004), who explored
service networks in a B2C context. Our conceptualization
holds implications for both managers and researchers.
Managerial implications
Research within the B2C environment provides empirical
evidence that in service networks, partner firm performance
influences customer evaluations of the focal firm. If this
finding holds in the B2B environment, then selling firms
would be advised to consider partner firms carefully, keeping
in mind that each brand touchpoint affects the focal brand.
Firms with similar cultures that demonstrate a willingness to
cooperate and coordinate activities to achieve network goals
would be good candidates (Bucklin and Sengupta, 1993).
Practitioners should also recognize the important role
customer contact personnel play in brand image and equity
development, whether those contact personnel be from the
focal firm or a partner firm (Berry, 2000). Practitioners
representing the focal firm could, for example, share hiring
criteria and training modules with partner firms as a means of
ensuring more consistent service delivery.
Our proposed model highlights the importance of a strong
brand name, particularly if partner firms under-perform
(Ahluwalia et al., 2000; Dube and Maute, 1998). Certainly a
strong brand name can be crucial to organizational success,
regardless of context. Still, the strength of the brand takes on
greater importance when that brand could be affected by a
partner firm. Industrial organizations participating in service
networks are therefore advised to be aware of the brand image
and the strength of that image, and to consider likely
ramifications if a partner firm delivers poor service to a
customer. The focal firm also needs to be aware of the
strength of the brand relationships with partner firms. If the
focal firm has faith in the partner firm and customers perceive
the link is weak, the focal firm might take steps to build that
relationship. On the other hand, if the focal firm has less
confidence in the partner firm, the focal firm may wish to
keep the relationship weak and/or find a new partner firm.
We have proposed that the importance of the service
provided by the partner firm will moderate the effects of
partner performance on customer evaluations of the focal firm.
One can imagine, for example, the importance of call center
services to the customers of a B2B firm that has outsourced
these activities completely. Because this service is of great
importance to the customers serviced by the call center, good
performance by the partner firm would likely result in positive
evaluations of the focal firm, whereas bad performance would
likely result in negative evaluations. Alternatively, the
outsourcing of billing activities may have less of an effect, in
that customers may not recognize the importance of this
activity. Practitioners will need a clear understanding of which
services are perceived important by their customers. By
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Volume 22 · Number 6 · 2007 · 372 –382
focusing on those service elements most important to
customers, the focal firm will be in a better position to
manage brand strength and brand image effectively.
Implications for future research
By developing a framework of B2B service networks we have
taken an important step in furthering theory development in
this new area of research. Clearly the next step in the research
process involves testing the proposed model. Is the model
reflective of B2B service networks, or are alternative models
possible? Have we accurately conceptualized the moderating
variables? Only further research can answer these questions.
In addition to extending current theory on service
networks, we also extend theory on industrial branding, a
construct that remains under-researched in the business-to-
business literature (Lynch and de Chernatony, 2004). Yet
industrial firms increasingly are turning to branding to
differentiate both products and services (Shipley and Howard,
1993). We suggest that brand strength of the focal firm will
moderate the relationship between partner firm performance
and customer evaluations of the focal firm, including brand
image. Empirical tests of this relationship will add to our
understanding of the role business brands play in the minds of
industrial customers. Do organizational buyers perceive a
single experience as suggested by B2C service network
research (Morgan, 2004; Morgan and Tax, 2004)? Or, can
organizational buyers clearly delineate the service/brand
offered by the focal firm as compared to the partner firm?
Research examining these questions is needed.
We have argued that key relationship-building functions
comprising after-sales service and support are likely to be
outsourced to parties external to the B2B selling firm.
However, one can find examples of B2C and B2B firms that
have brought previously outsourced services in-house due, in
part, to the focal firm’s negative experiences. For instance,
less than a year into the contractual relationship, Sears
recently terminated a ten-year, $1.6 billion outsourcing
agreement with Computer Science Corp. (CSC) based on
allegations that CSC failed to perform certain obligations
(Chain Store Age, 2005). Similarly J.P. Morgan has not
renewed a $5 billion contract agreement with IBM, deciding
instead to begin performing many IT functions in-house
(King, 2005). Under these conditions the B2B service
network would become less complex; indeed, if all
outsourced functions were brought in-house, the B2B
service network would cease to exist. Experts have argued
that examples such as those previously described do not
indicate a counter-trend to the outsourcing movement (King,
2005). Nevertheless, as a means to provide practitioners
relevant information, researchers might track these examples
to determine if a new trend is on the horizon. Research
investigating the drivers of decisions to revert previously
outsourced service production in-house would also aid our
understanding of changes in service networks.
Conclusion
Service networks represent an exciting new area of research.
By developing a conceptual model of B2B service networks
we have addressed several gaps in the industrial marketing
literature, namely B2B services and branding, and extended
previous literature on service networks (i.e. Morgan, 2004;
 Branding implications of partner firm-focal firm relationships
Felicia Morgan et al.
Morgan and Tax, 2004). Although we have taken an
important first step in the investigation of these topics,
much work remains. We hope our model will provide the
foundation for a research stream investigating service network
and branding issues in a B2B context.
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 Branding implications of partner firm-focal firm relationships
Felicia Morgan et al.
Zeithaml, V. and Bitner, M. (2003), Services Marketing:
Integrating Customer Focus across the Firm, McGraw-Hill
Irwin, New York, NY.
About the authors
Felicia Morgan earned her PhD in marketing at Arizona State
University in 2004 and is currently an Assistant Professor of
Marketing at Ohio University. Her research publications and
presentations focus on services marketing and management,
services branding, and managing customer experiences. Prior
to earning her doctorate, Felicia spent over 12 years working
in marketing, finance, and management within the services
sector. She also enjoyed an early career as a professional
musician. Felicia holds a Bachelor’s degree and an MBA from
the University of New Orleans. Felicia Morgan is the
corresponding author and can be contacted at:
morganf1@ohio.edu
Dawn Deeter-Schmelz (PhD, University of South Florida)
is Associate Dean for Strategy and Operations, Marketing
Department Chair, and O’Bleness Professor of Marketing at
Ohio University. Her research interests include customer
To purchase reprints of this article please e-mail: reprints@emeraldinsight.com
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382
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 372 –382
service teams, sales management and buyer-seller relationship
issues, business-to-business e-commerce, and scale
development. She has published in Journal of the Academy of
Marketing Science, Journal of Marketing Theory and Practice,
Industrial Marketing Management, Journal of Supply Chain
Management, Journal of Personal Selling & Sales Management,
Journal of Marketing Education, and Journal of Business
Logistics, among others.
Christopher R. Moberg is the Robert H. Freeman Professor
of Logistics Management in the Marketing Department at
Ohio University. He received his DBA from Cleveland State
University, and his research and teaching interests include
logistics and supply chain management, marketing strategy,
business ethics, and services marketing. His research has been
presented at several national conferences and appeared in
several journals, including the Journal of Business Logistics,
International Journal of Physical Distribution & Logistics
Management, International Journal of Logistics Management,
Supply Chain Management Review, Annals of Operations
Research, Mid-American Journal of Business, Marketing
Education Review, and Journal of Services Marketing.
 The importance of brand in the industrial
purchase decision: a case study of the UK
tractor market
Keith Walley, Paul Custance and Sam Taylor
Harper Adams University College, Newport, UK
Adam Lindgreen
Hull University Business School, Hull, UK, and
Martin Hingley
Harper Adams University College, Newport, UK

Abstract
Purpose – With brands being an important source of competitive advantage, knowledge of branding is needed to inform their management. After
reviewing the literature, the article aims to report the findings of a case study that investigated the role of branding in the industrial purchase of
agricultural tractors in the UK. The study’s overall conclusion is that branding can play an important role in industrial purchase decisions.
Design/methodology/approach – Various attributes, together with levels of these attributes, were identified from the literature and a series of semi-
structured interviews with three farmers and farm contractors. Subsequently, conjoint analysis was employed to reveal how purchasers made their
purchase decision. A total of 428 farmers and farm contractors (a 28.7 per cent response rate) ranked 25 cards that had been constructed to profile
various hypothetical tractor designs.
Findings – Five attributes appeared from the literature review and interviews – brand name, price, dealer proximity, quality of dealer’s service, and
buyer’s experience of the dealer. The conjoint analysis revealed that brand accounts for 38.95 per cent of the purchase decision, ahead of price (25.98
per cent) and service (14.90 per cent). The importance of brand varies according to the tractor brand. Also, the overall utility varies, with John Deere and
New Holland brand names appearing as marketing assets and Valtra, Massey Ferguson, and Case IH as marketing liabilities. Among the study’s other
findings are that UK tractor buyers are brand loyal.
Research limitations/implications – The study focuses on tractors in the UK, so while it provides an insight into the role of branding in an industrial
purchase situation, further research is required in other product categories before the findings can be generalised.
Practical implications – Manufacturers and distributors need to maintain a strong image. Also, they may charge higher prices for tractors, using the
extra revenue to reinforce their brand image. On-farm demonstration of new tractors is suggested as an experiential marketing strategy. Special
attention should be given to the location of dealers and the service they provide.
Originality/value – Research concerning branding in an industrial purchase context is limited, dated, or contradictory. This article contributes with
empirical findings on industrial brand management in an important and relevant context.

Keywords Brand management, Marketing, Purchasing, Tractors, United Kingdom

Paper type Research paper

An executive summary for managers and executive
readers can be found at the end of this issue.
Introduction
The basis for above-average corporate performance in
business and industrial marketing is a significant competitive
advantage (Porter, 1985). The sources of such a competitive
advantage are many and varied. Some organisations base their
competitive advantage on physical assets such as a
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0885-8624.htm
manufacturing facility, some on their employees, and some
on their distribution networks (Kotler, 2000). Many others,
however, seek to attain a competitive advantage from
intangible assets such as their reputation or the brands that
they own (Beverland, 2005; Keller, 1993; Low and Blois,
2002). Yet, research to date on branding in business and
industrial marketing has been limited (Beverland et al., 2006;
Low and Blois, 2002; Mudambi et al., 1997; Nilson, 1998).
We address the fundamental question of how organisations
manage their brands in a systematic, meaningful, and
informed manner, thereby responding to calls for empirical
studies on industrial brand management (cf. Beverland et al.,
2007; Webster, 2000).

The authors gratefully acknowledge the support and assistance provided

Journal of Business & Industrial Marketing
22/6 (2007) 383– 393 by Valtra UK Ltd and Profi International, as well as Sandra Turner and Sue
q Emerald Group Publishing Limited [ISSN 0885-8624] Taylor (Harper Adams University College) in carrying out this study and
[DOI 10.1108/08858620710780145] preparing this article. The authors contributed equally to this paper.

383
 The importance of brand in the industrial purchase decision
Keith Walley et al.
Branding has been subject to considerable research and
debate in recent times (e.g. Aaker and Joachimsthaler, 2000;
Bendixen et al., 2004; Brodie et al., 2002; Gordon et al., 1993;
Hutton, 1997; Low and Blois, 2002; Michell et al., 2001;
Mudambi, 2002; Shipley and Howard, 1993; Webster and
Keller, 2004). Despite this interest, however, there remain some
areas where research is limited, dated, or contradictory (Glynn
et al., 2007). One such area relates to the role of branding in an
industrial purchase decision (Blombäck and Axelsson, 2006).
Our article seeks to address this situation by reporting on the
findings of a study that sought to assess the relative importance
of brand as a factor influencing new tractor buyer behaviour in
the UK, and to differentiate the major tractor brands according
to their image amongst farmers and farm contractors. The
analysis of branding in this context is paramount because the
reduction in the sales of tractors in the UK has meant that the
market has become increasingly competitive, and that
manufacturers and distributors have sought original means by
which to achieve competitive advantage. With brands known to
play an important role in business customers’ decisions
(Bendixen et al., 2004; Michell et al., 2001), one strategy in
the UK tractor market – identified in our exploratory semi-
structured interviews – appears to have been based on a better
understanding of the purchase decision of farmers and farm
contractors, as well as the role of the tractor brand. However, a
thorough investigation of the use of branding in this market is
needed. Our findings are derived from a multi-attribute
conjoint analysis of data collected from 428 UK farmers and
farm contractors.
Our article is structured as follows. First, to guide the study
we provide a review of the brand literature. In particular, this
section examines branding in industrial marketing including
the UK tractor market, which constitutes the study’s context.
The next section describes the research methodology with
particular emphasis being given to an explanation of the
conjoint analysis. Our findings, together with the results of the
conjoint analysis, are presented and then discussed in relation
to three hypotheses before the article arrives at a number of
managerial implications. The article finishes with a
consideration of the research limitations and directions for
future research.
Branding
There are numerous definitions of the term brand found in
the literature. One of the more pragmatic definitions is
proffered by The American Marketing Association (cf.
Kotler, 2000, p. 404), which defines a brand as “a name,
sign, symbol, or design, or a combination of them, intended
to identify the goods or services of one seller or group of
sellers and to differentiate from those of competitors”. A
useful model for explicating the various components of a
brand uses the various definitions of brand to identify what
are believed to be the key themes (De Chernatony and
Dall’Olmo Riley, 1998). The model, illustrated in Figure 1,
views a brand as a multi-dimensional construct matching a
firm’s functional and emotional values with the performance
and psychological needs of consumers.
In line with this model, a brand has been viewed as
essentially being a seller’s promise to deliver a specific set of
features, benefits, and services consistently to the buyers
(Kotler, 2000). Therefore the brand is not just a name; the
challenge is to develop a deep set of positive associations for
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Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 383 –393
the brand – a strong brand image. The most successful
brands have created wealth by attracting and retaining
customers as a result of combining an effective product,
distinctive identity, and added values in the mind of the
customer (Doyle, 1998).
The message about a brand that a firm seeks to
communicate is known as brand identity (Aaker, 1991,
1996). This communication is undertaken via the product,
the brand name, symbols and logos, historical roots, the
brand’s creator, and advertising (Kapferer, 1998). However,
the message that a firm seeks can be quite different to that
which the customer perceives, which is referred to as the
brand image. Brand image is a perception and is not
necessarily fact. Buyers may assume, or expect, things about a
firm without any objective evidence; they will hold an opinion
(Hague and Jackson, 1994). The buyer’s perception of quality
will directly affect purchase decisions and brand loyalty,
especially when a buyer is not motivated, or able, to conduct a
detailed analysis (Aaker, 1991). Brand awareness refers to the
strength of a brand’s presence in the consumer’s mind. It
relates to consumers memory of the brand, which can be
measured in different ways (Aaker, 1996). Essentially, brand
awareness can be determined by measurement of either brand
recognition, brand recall, or both (Keller, 1993).
A brand that is established and has the patronage of
consumers is said to possess “brand loyalty”. Brand loyalty
has been formally defined as “a strongly motivated and long
standing decision to purchase a product or service to the
extent that buyers become loyal to a specific brand” (Dibb
et al., 2001, p. 271). It can be extremely advantageous to a
seller because it is often much cheaper to retain customers
than to attract new ones (Lindgreen, 2001, 2004; Sheth and
Parvatiyar, 2000). The brand loyalty of the customer base is
often the core of a brand’s equity, the one indicator that is
demonstrably linked to future profits, since brand loyalty
translates into future sales (Aaker, 1991). If customers are
unconcerned with the brand, and buy with respect to features,
price, and convenience, then there is likely to be little equity;
however, if customers continue to purchase the brand in the
face of competitors with superior features, price, and
convenience, considerable value exists in the brand (Aaker,
1991).
Brand equity is especially important in industrial marketing.
This is because often alternatives in industrial purchase are
“toss-ups”, meaning that the decisive factor can turn upon
how a buyer perceives a brand (Aaker, 1991). However,
despite this claim, research relating to industrial products has
tended to focus on the dynamics of organisational buying
behaviour, buyer-seller relationships, and industrial
segmentation (Mudambi et al., 1997). Particularly in recent
times, there has been little research carried out explicitly into
industrial branding (McQuiston, 1989; Michell et al., 2001;
Mudambi et al., 1997; Rosenbroijer, 2001; Shipley and
Howard, 1993). The study on which this article is based,
therefore, seeks to add to the limited contemporary research
relating to the role of the brand name in industrial purchase
decisions.
Branding in an industrial purchase decision
context
There are a number of characteristics that are suggested to
differentiate industrial markets from consumer markets:
 The importance of brand in the industrial purchase decision
Keith Walley et al.
Figure 1 Twelve key themes of brand definitions
.
fewer, larger buyers;
.
more people involved;
.
closer buyer-seller relationships;
.
products often need customising to customers’ needs;
.
purchases are negotiated less frequently;
.
extended negotiations;
.
greater loyalty;
.
more rational buying behaviour;
.
better informed buyers; and
.
existence of second-hand markets (De Chernatony and
McDonald, 1998; Kotler, 2000).
This list has recently been expanded with other factors such
as the personal goals of buyers (Kotler et al., 2001), new
features (Nowlis and Simonson, 1996), compatibility with
future purchases (Shaw et al., 1989), and elimination of risk
(Foxall, 1979).
One study that produced findings which are of particular
interest in the context of our study was conducted by Kool
(1994). He surveyed 878 farmers concerning the purchase of
a range of agricultural inputs, including machinery, and
concluded that much of the farmers’ buying behaviour was
influenced by the desire for simplification. This in turn meant
that habitual purchase was common, and that brand loyalty
was important as a buying factor. The fact that brand loyalty
is an important factor in the purchase decisions of farmers
may well be down to a lack of motivation or ability to conduct
a detailed analysis of the alternatives (Aaker, 1991).
Some differences between consumer and industrial brand
management are evident. In industrial markets the brand
name is often the firm name because the small size of market
segments does not justify the promotion of different brands
(Hague and Jackson, 1994). This differs from consumer
markets, which comprise multiple segments so that
companies develop a number of brands to target a range of
customers in these segments. This observation has important
consequences. Brand managers in consumer markets place
more emphasis on individual rather than corporate brands,
and direct their efforts toward minimizing the size of the
brand portfolio, while maximizing coverage. This is in
contrast to brand managers in industrial markets who tend
to focus on building the brand at the corporate level, with
some experimentation at the product level, and gradually
working toward increasing the size of the portfolio through
acquisitions (Beverland et al., 2006; Mudambi, 2002).
In industrial marketing the brand appears to play an
important role (Doyle, 1998; Michell et al., 2001; Mudambi
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et al., 1997; Shipley and Howard, 1993). Frequently, many
industrial products within any given market have nearly
identical physical and performance specifications, and
differentiation can be difficult to achieve. However, there is
often one product that maintains high market share, even at a
premium price (Mudambi et al., 1997). It would appear
reasonable to assume that this differential has been achieved
on the basis of brand name, albeit the brand name may be
supported by a corporate name (Saunders and Watt, 1979).
Overall, Michell et al. (2001, p. 424) found that “industrial
firms perceive several important features as being associated
with strong brands, namely perceived quality, recognisable
image, market leadership, and differentiated position”.
Brands, it would appear, reduce the industrial customer’s
perceived risk by providing reassurances regarding price and
quality of the product, and when this trust becomes
entrenched then there is a reluctance to try different
products, and an inertia develops.
The UK tractor market
In the UK, brand names are widely used, and are perceived to
be important buying criteria by industrial companies (Shipley
and Howard, 1993). In the tractor market, for example, an
investigation into farmers’ tractor purchase decisions
concludes that “farmers’ buying decisions for tractors
parallel the behaviour of professional buyers in
manufacturing and service industries” (Foxall, 1979, p. 307).
As such, the UK tractor market would seem to represent a
good basis for conducting research into the influence of
brands in industrial purchase decisions.
Agriculture in the UK has undergone continuous change
since the Second World War, requiring all related industries,
including tractor manufacturers, to adapt to meet the needs of
the farming population (Bourlakis and Weightman, 2004;
Eastham et al., 2001). The supply of agricultural tractors in
the UK is controlled by national distribution subsidiaries such
as Valtra UK Ltd. Each firm has a network of franchised
dealerships. Until recently, dealers generally sold only one
brand of tractor, but developments since December 2001
have seen some dealers taking on a second tractor franchise. A
number of dealerships have become “dual-franchised” and
will, for example, sell McCormick tractors alongside their
existing Valtra range (Profi International, 2002).
Dealers are vitally important to the manufacturers for sales
of new products and the rapid supply of parts and service in
 The importance of brand in the industrial purchase decision
Keith Walley et al.
the event of a machinery breakdown (Key Note, 1997). A
decrease in the UK machinery sales in the last ten years, an
increase in the mobility of customers, and a greater freedom
of choice brought about by improvements in communication
links have resulted in rationalisation and the resulting closure
of many agricultural machinery dealers. Although recently
there has been a small recovery, the market for tractors in the
UK in 2002 (unit sales about 15,000) was considerably
smaller than in 1995 (unit sales about 20,000).
The significant decrease in the number of new tractors sold
can, to a large extent, be attributed to a fall in the output
prices of agricultural commodities such as milk and grain,
which has been translated into reductions in farm income
levels (Department for Environment, Food and Rural Affairs,
2002). The reductions in income levels have led producers to
reduce their costs through economies of scale by farming
larger areas of land. This has led to the purchase of fewer, but
larger tractors, requiring less labour. Massey Ferguson, Fendt
and Case IHA, New Holland, and John Deere are the four
brands with the largest share of the UK market. A profile of
these and other UK tractor brands is provided in Table I. It is
important to note that the market for tractors comprises not
just farmers, but also farm contractors who supply machinery
services to the farming industry.
Our study was designed to test the following three
hypotheses:
H1. Brand name is not an important factor in the choice of
tractors by UK farmers and contractors.
H2. UK tractor buyers are not brand loyal.
H3. The major tractor brands available in the UK are
perceived in a relatively similar way.
Methodology
There have been numerous studies that have sought to
measure some aspect of brand value, strength, loyalty, or
importance (e.g. Hague and Jackson, 1994). However, many
adopt a direct approach to questioning, which requires
respondents to make an assessment of a brand somewhat
independently of other factors. This is a difficult approach, as
when making actual purchase decisions, customers would
consider a number of factors together. To overcome this
apparent methodological weakness we employed the
multivariate technique known as conjoint analysis.
Table I Profile of the major UK tractor brands in 2000
Brand Parent company
Massey Ferguson AGCO
Fendt AGCO
Case IH CNH Global
New Holland CNH Global
John Deere Deere & Co.
Fastrac JCB
McCormick Landini
Valtra Partek
Renault Renault Global
Notes: Adapted from Agricultural Engineers Association (2002), Profi International (1997, 2001), Currie (2001), John Deere (2002), Key Note (1997),
Kutschenreiter (1996), Partek (2002), and Roberts (2000)
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 383 –393
Conjoint analysis is used to reveal how people make complex
judgements and is based on a number of assumptions. One is
that purchase decisions are not based on a single factor, but on
several factors “considered jointly” (American Marketing
Association, 1992). Another assumption is that products or
services are made up of a series of features or attributes, for
example brand and price (Chisnall, 1997), about which
respondents can make judgements by stating their preference
for the various attribute combinations by ranking them in
priority order of purchase or rating the importance of attributes
against one-another. The more dominant the interest in a
particular attribute, the higher the satisfaction or utility
ascribed to it by the respondents. As such, conjoint analysis
provides an insight into the relative importance of product
attributes and how they relate to each other.
Conjoint analysis was developed within the fields of
mathematical psychology and psychometrics and popularised
in an article by Luce and Tukey (1964). The technique was
subsequently used to measure consumer purchase decisions
(Green and Rao, 1971; Green and Srinivasan, 1978; Green and
Wind, 1975). For examples of applications of conjoint analysis
in relation to consumer purchase decisions we refer to Bowditch
et al. (2003), Steenkamp (1987), Walley et al. (1999), and
Weiner (1994), among others.
A full factorial design was employed based upon tractor
attributes and the levels of these attributes (Table II). The
attributes were identified in two ways. Firstly, a literature
review suggested that price, dealers and sales representatives,
after sales service, past experience, technical performance,
and other farmers were important brand attributes (cf. Foxall,
1979). Secondly, a series of semi-structured interviews (with
each interview lasting between 60 minutes and 90 minutes)
with two farmers and one farm contractor partly confirmed
this review. The result of this approach was that five attributes
were kept:
1 brand name;
2 price;
3 dealer proximity;
4 quality of dealer’s service; and
5 buyer’s experience of the dealer.
The decision as to which attributes to use is particularly
important in conjoint analysis as the technique works best
with a relatively small number of attributes, which should
account for the majority of the purchase decision (Green and
Srinivasan, 1978; Auty, 1995).
UK market share Most recent merger/acquisition
13.6 per cent combined Bought by AGCO, 1994
Bought by AGCO, 1994
15.4 per cent Merged with New Holland by Fiat, 2000
22.4 per cent Merged with Case IH by Fiat, 2000
29.0 per cent Sold in UK under Deere & Co since 1966
2.4 per cent Launched under JCB banner, 1990
N/A Bought by Landini as part of CNH deal, 2001
3.5 per cent Acquired by Partek, 1997, and Kone, 2002
3.9 per cent Sold in UK under Renault SA since 1977
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Keith Walley et al. Volume 22 · Number 6 · 2007 · 383 –393

Table II Attributes and levels employed in the survey

Attribute Levels
Brand name Case IH; John Deere; Massey Ferguson; New Holland; Valtra
Price £30,000; £35,000; £40,000
Dealer proximity 0-15 miles; 16-30 miles; over 30 miles
Quality of dealer service Average; good; very good
Buyer’s experience of the dealer Never bought a tractor from the dealer before; bought one or more tractors from the dealer before

The information generated via the interviews was used to The overall results of the conjoint analysis are shown in
construct 25 cards profiling various hypothetical tractor Figure 2. It is readily apparent that brand name is the most
designs as determined via an orthogonal array. SPSS software important factor when purchasing a tractor as it accounts for
was used to generate the orthogonal design, as well as to 38.95 per cent of the decision. This is significantly ahead of
analyse the data collected, calculate the attribute importance, price, dealer proximity, and the quality of dealer service that
and establish the utility values of the various attributes and account for 25.98 per cent, 14.56 per cent, and 17.90 per cent
levels. Subsequently, the survey was piloted on ten farmers of the decision; the buyer’s experience of the dealer only
and farm contractors, who were asked to rank the cards in accounts for 5.61 per cent of the decision.
terms of their preference for the profiles and record the When broken down by “brand owned” (Figure 3) the
ranking, along with some background information, on a importance of the brand varies from 45.31 per cent for John
questionnaire. Deere owners through to 39.68 per cent, 38.02 per cent, and
35.35 per cent for Massey Ferguson, New Holland, and Case
Results IH owners, and, lastly, to 31.16 per cent for Valtra owners. In
the latter case brand name is not as important a purchase
The sample frame for the study was the database of a major factor as price.
tractor manufacturer that comprised the names and addresses In terms of the overall utility that respondents attached to
of 15,000 farmers and farm contractors (this list was not a the brands (Figure 4) there was a range of scores, with John
customer list). Of the 1,492 randomly selected farmers and Deere receiving þ 2.7318 and Valtra 22.4654. It would
farm contractors who were sent a questionnaire in the post, appear, therefore, that the John Deere and New Holland
usable replies were received from a total of 428. The response (utility of 0.3252) brand names are marketing assets while the
rate of 28.7 per cent was achieved with the aid of an incentive Valtra, Massey Ferguson (utility of 2 0.4551), and Case IH
of a subscription to Profi International, which is an agricultural (utility of 2 0.1364) brands are marketing liabilities.
machinery publication. This number of responses ensured However, when the same data is broken down by “brand
that the survey had a 95 per cent level of confidence (^4.7 owned” (Figure 5), the vested interest of the brand owners
per cent accuracy). A profile of the respondents is shown in becomes clear, as they attach a strong positive utility score to
Table III. This profile was considered a reasonable the brand that they own. Whether this latter phenomenon is
representation of the target population based on type of farm. the reason the respondents purchased the brand that they
have or has developed post purchase is impossible to say
Table III Respondent profile without further research. The strong positive utility scores
attached to the John Deere brand by all groups of respondents
Sample Population suggest that this is the “Rolls Royce” brand of the tractor
Characteristic Sub-characteristic (per cent) (per cent) market and provides additional support to the contention that
Farm type Mixed farmers 49.8 46.9 in industrial markets there is often one brand that achieves a
Arable 22.6 21.3 significant competitive advantage on the basis of branding
Dairy 12.8 7.6
(Mudambi et al., 1997).
Beef and sheep 14.8 24.2
Farm size 1-50 ha 8.9 77.2 Discussion of findings
51-100 ha 32.9 11.1
The study produced a wide range of interesting results, but
101 þ ha 58.2 11.7
the discussion will focus on addressing the three hypotheses.
Tractor brand Case 156
John Deere 132
H1. Brand name is not an important factor in the
Massey Ferguson 207
choice of tractors by UK farmers and farm contractors
New Holland 142 The literature does not provide a clear picture as to the
Valtra 16 importance of branding in an industrial context. Although
Others 180 based on a small sample the study of tractor purchase by
Nature of business Farmers 70.1 Foxall (1979) suggested that the most important factor was
Farmers/contractors 24.1 technical performance (see Table III). Interestingly Foxall’s
Contractors 5.8 study did not include “brand name” as a purchase factor,
Source: Adapted from Department for Environment, Food and Rural Affairs probably because at the time it was not perceived as being
(2003) important. Indeed, some of the respondents involved in the
exploratory phase of our study suggested that the primary

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Keith Walley et al. Volume 22 · Number 6 · 2007 · 383 –393

Figure 2 Overall attribute importance

Figure 3 Attribute importance by brand ownership

Figure 4 Overall brand utility

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Keith Walley et al. Volume 22 · Number 6 · 2007 · 383 –393

Figure 5 Brand utility by brand ownership

consideration in the choice of a tractor is the required size and Table IV Selected UK four-wheel drive tractor prices
specification. However, later works do acknowledge that
Brand Model Horse power List price (£)
brand is an important factor in the buying decision (e.g.
Michell et al., 2001; Shipley and Howard, 1993), with Belarus 920 90 12,595
Mudambi et al. (1997) going so far as to claim that the role of Case New Holland CS94DL 94 34,490
“brand” is more important in complex buying decisions. John Deere 6210 90 36,752
What none of this literature states is that brand is the most Deutz Fahr Agroplus 95 95 29,200
important factor in the industrial purchase decision. In our Fendt 309CA 95 39,184
study, however, brand accounted for 38.95 per cent of the Massey Ferguson 4255LP 95 29,800
purchase decision and was therefore the most important Renault Ares 540RX 90 30,905
influencing factor. As a consequence, H1 is rejected as brand Same Silver 90i 90 27,000
name is an important factor in the choice of tractors by UK
Valtra Mezzo 6300X 90 29,500
farmers and contractors.
Zetor 9641 93 20,958
It is quite likely that the high importance rating given to
“brand name” in this survey could be as a result of “inertia”, Source: Market Guide (2002)
which refers to purchases based on habit where customers buy
a particular brand because they have always bought that
brand (Hague, 1987). They are familiar with the brand, suppliers as a means of reducing risk or maintaining trade-in
satisfied with its performance and as a result repeat purchase value (Aaker, 1991). In addressing H2, this study attempted
of that brand is perceived as the safe option. to establish the role of brand loyalty in relation to tractor
Closely related to purchase of products on the basis of purchase.
“inertia” is purchase on the basis of risk reduction. Risk With the exception of those respondents owning Massey
reduction is generally believed to be a key factor in industrial Ferguson tractors, the tractor owners all award the highest
purchase decisions (Anderson and Narus, 1999; Foxall, 1979; utility scores to the brand that they own (Figure 5), which
Shipley and Howard, 1993). Indeed, it is likely that the suggests that tractor owners are very brand loyal. The
common practice in industrial markets of using the anomaly concerning Massey Ferguson could be explained by
manufacturer or company name as the brand, with products a number of factors. First, there have been problems with the
being identified by sub-brand names and numerical reliability of Massey Ferguson tractors, which might cause
designations (Hague and Jackson, 1994; Saunders and Watt, their owners to rate them low. Secondly, negative publicity
1979), is intended to reassure prospective customers. surrounding the closure of the AGCO manufacturing plant
Examples are provided in Table IV. where Massey Ferguson tractors are made might cause a
similar effect. Last, the fact that Massey Ferguson tractors
H2. UK tractor buyers are not brand loyal were market leaders in the 1990s means that there are still
The literature concerning the influence of brand loyalty on large numbers on farms despite farmers having bought other
purchase decisions in industrial markets is somewhat types of tractor more recently. As such, respondents to the
inconclusive. For example, for some products brand loyalty survey might be classified as Massey Ferguson owners even
is weaker today due to economic pressures, but for others the though they would have scored the brand bought more
opposite is true as buyers place greater reliance and trust in recently better than the Massey Ferguson tractor.

389
 The importance of brand in the industrial purchase decision
Keith Walley et al.
Interestingly, the two brands with the highest utility ratings
from their owner groups were John Deere and Valtra. These
are the two brands that achieved the highest rebuy scores in
the 2001 “Top Agrar” survey (Vale, 2002), which adds
further support for the contention that tractor buyers are
brand loyal, and that H2 therefore must be rejected.
The findings of this study concur with previous studies that
concluded that brand loyalty is an important factor
influencing tractor buying (Foxall, 1979; Kool, 1994).
Indeed, when the findings are related to the customer
loyalty ladder (Christopher et al., 1991), John Deere would
appear to have buyers who are “committed” to the brand
while all the other brands seem to fall within the top three
bands and command some degree of loyalty. However, there
would also appear to be evidence to suggest that some buyers
are also more sensitive to price and do not demonstrate
particularly strong brand loyalty.
H3. The major tractor brands available in the UK are
perceived in a relatively similar way
The brand utility values shown in Figure 4 clearly indicate
differences in the perceived importance of the various brand
names. John Deere has a strong positive value while, at the
other extreme, Valtra has a substantial negative value. It is
interesting to note that the ranking of the brand names in this
study matches the ranking of the same brands according to
UK market share (Table I). It would appear, therefore, that
the John Deere brand represents a valuable marketing asset
while the Valtra brand name is something of a marketing
liability.
The literature provides several suggestions as to why buyers
might attach substantially different utility values to each of the
brands. These explanations range from those that are firm-
specific (Hague and Jackson, 1994; Michell et al., 2001;
Shipley and Howard, 1993; Vandenbosch and Weinberg,
1997) through to more general explanations of buying
behaviour relating to branded products (Mudambi et al.,
1997).
John Deere is marketed in the UK as a quality brand. The
John Deere product range is promoted extensively in the
literature on the basis of superior reliability, and this is used to
justify a policy of premium pricing. Indeed, the high UK
market share held by the brand would suggest that buyers are
prepared to pay for the quality of John Deere products
(Hague and Jackson, 1994; Michell et al., 2001; Shipley and
Howard, 1993; Vandenbosch and Weinberg, 1997).
Another explanation for the John Deere brand attracting
the highest utility score may be due to its position in the
market. That is, some industrial buyers feel that they gain
prestige or status by buying from a market leader and that
large size and market share can inspire confidence in buyers
(Mudambi et al., 1997).
Confidence in a brand is generated in part by its history and
in particular its longevity and continuity (Hague and Jackson,
1994). In the case of John Deere there has been very little
change associated with the firm and the brand for the last 20
years. However, this is not the case with the other four brands,
which have undergone quite considerable change. Massey
Ferguson was taken over by AGCO in 1994, Ford was taken
over by New Holland and Fiat, and has now merged with
Case IH, while Valtra has undergone a “bewildering” (Profi
International, 2001) series of name changes during the same
period. As previously stated, brand name serves to provide
390
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 383 –393
customers with trust and confidence, and this industry would
appear to be a good example of the benefits of ensuring
consistency of brand name.
It would seem, therefore, that the image held by the buyers
of the brand will undoubtedly impact upon their choice
(Aaker, 1991), and that the results of our study support the
proposition that brand names are used to differentiate similar
products (Sullivan, 1998). It would seem logical, therefore, to
reject H3.
Managerial implications
The study found that brand name is important in the choice
of tractor, tractor buyers are brand loyal, and that the major
brands of tractor available in the UK are not perceived in a
similar way because of the brand component. These findings
have important implications for the manufacturers and
distributors of tractors in the UK. In the first instance, the
fact that brand image does influence the purchase of tractors
means that manufacturers and distributors need to maintain a
strong image in the mind of the customer. Takeovers and
mergers appear to alter and weaken brand image.
While for some customers price is the most important
purchase factor, for most it is not, so manufacturers and
distributors may be able to exploit this finding via higher
prices particularly given the wide range of prices charged for
the various products (see Table IV). Indeed, the extra revenue
might be used to reinforce the brand image.
Brand loyalty is strong amongst tractor buyers. Prior
experience of a product through ownership can be critical
when a product is being considered for purchase.
Manufacturers and distributors are therefore advised to
market their current offerings to existing customers and
develop marketing strategies that will give potential new
customers experience of their product offerings. One example
of an experiential type marketing strategy are the on-farm
demonstrations that some manufacturers and dealers already
undertake.
While brand image, price, and brand loyalty play the key
roles in many tractor purchase decisions manufacturers and
distributors should note that dealers may act as important
intervening factors. Both the location of the dealership and
the quality of the service provided can enter into a customer’s
purchase decision and serve as important influencing factors.
Lastly, while these results apply to the purchase of
agricultural tractors, it would appear reasonable to assume
that this case is reasonably representative of industrial markets
in general and that the findings may be applied on a more
general basis. As such, it would appear possible to conclude
that branding can play an important role in industrial
purchase decisions.
Research limitations and future research
As in most research, this study has certain limitations that
impact our interpretation of the results, while at the same
time suggesting directions for future research. These
limitations must therefore be considered. First, the scope of
the study is limited to the UK tractor market. While the study
does provide an insight into the role of branding in an
industrial purchase situation, further research is required in
other product categories before the findings can be
generalised. Second, the profile of the survey respondents is
 The importance of brand in the industrial purchase decision
Keith Walley et al.
mostly similar to that of the general population, except that
farm sizes of 51-100 ha and 101 þ ha are over-represented in
the study, while beef and sheep farms are under-represented.
The discrepancy concerning farm size is probably explained
by a trend for large farms to own tractors with smaller farms
contracting-in tractors when required, and a tendency for
non-owners not to reply to the survey. That difference
between the sample and general population could impact the
generalisability of the study’s findings. Future research should
investigate this issue.
The limitations mentioned above should be kept in mind
when considering our results. Despite the limitations,
however, we believe that we have made a step toward
understanding branding in the industrial purchase decision.
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About the authors
Keith Walley works with Harper Adams University College.
He has published in Industrial Marketing Management, British
Food Journal, Business Strategy and the Environment,
International Small Business Journal, and International Studies
of Management and Organization. His research interests
include competition and coopetition.
Paul Custance works with Harper Adams University
College. He has published in Business Strategy and the
Environment and Journal of Rural Enterprise and Management.
His research interests include services marketing, consumer
marketing, and brand management.
Sam Taylor graduated from Harper Adams University
College with a bachelor’s degree. He now works as a materials
handling marketing specialist with JCB Landpower Ltd.
Adam Lindgreen works with Eindhoven University of
Technology. He has published in Business Horizons, Industrial
Marketing Management, Journal of Business Ethics, and
Psychology & Marketing, among other journals. His research
interests include business and industrial marketing, consumer
behavior, relationship and value management, and corporate
 The importance of brand in the industrial purchase decision Journal of Business & Industrial Marketing
Keith Walley et al. Volume 22 · Number 6 · 2007 · 383 –393

social responsibility. He serves on the board of numerous
journals; guest edited journals include British Food Journal,
Entrepreneurship and Regional Development, Journal of Business
Ethics, Journal of Business & Industrial Marketing, and Supply
Chain Management. Adam Lindgreen holds an honorary
Visiting Professorship with Harper Adams University College.
Adam Lindgreen is the corresponding author and can be
contacted at: a.lindgreen@hull.ac.uk
Martin Hingley works with Harper Adams University
College. He has published in Industrial Marketing
Management, International Journal of Retail & Distribution
Management, Journal of Marketing Channels, and Journal of
Marketing Management, among others. His research interests
include relationship marketing, retailing, and supply and
purchasing management. He serves on the board of Industrial
Marketing Management.

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393
 Branding the business marketing offer:
exploring brand attributes in business markets
Michael Beverland and Julie Napoli
Department of Management and Marketing, University of Melbourne, Parkville, Australia, and
Raisa Yakimova
Department of Marketing, Monash University, Caulfield East, Australia

Abstract
Purpose – The paper seeks to provide a framework identifying key attributes that business marketers can use to build a strong brand identity.
Design/methodology/approach – The article is theoretical with case examples.
Findings – Drawing upon the business marketing offer, five potential strategies for building brands in business markets are outlined.
Practical implications – The paper identifies a contingent approach to brand identity in business markets.
Originality/value – This is the first paper to identify a relationship between positioning, the buying process and brand identity in business markets.

Keywords Brands, Business-to-business marketing, Value added

Paper type Conceptual paper

An executive summary for managers and executive
readers can be found at the end of this issue.
Introduction
Brands are increasingly viewed as offering a crucial point of
differentiation and a sustainable form of competitive
advantage for business-to-business marketers (Beverland,
2005; Lamons, 2005; Low and Blois, 2002; Mudambi,
2002). Brands play an important role in the decision-making
processes of business customers (Bendixen et al., 2004;
Michell et al., 2001), acting as a tool for achieving
organizational consensus among the many actors involved in
the buying process (Webster and Keller, 2004). Often it is a
manufacturer’s reputation combined with the buyer’s own
level of awareness and degree of loyalty shown to the
manufacturer that are important considerations in purchase
decisions (Cretu and Brodie, 2007; Mudambi, 2002). When
brand equity is high, customers are often more prepared to
pay a price premium for the product and are more likely to
engage in favorable word-of-mouth communications
regarding the firm and its brands (Bendixen et al., 2004;
Beverland, 2005).
To date, research in business-to-business branding has
lagged behind that for business-to-consumer markets (Low
and Blois, 2002; Mudambi et al., 1997). Because industrial
customers are believed to be more rational than end
consumers, and demand greater customization, brand
programs were thought to be of little use for business
marketers. It has only been recently that many business
marketers have begun to value the potential for brands
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0885-8624.htm
(Lamons, 2005; Webster and Keller, 2004). Research to date
has identified that branding programs are crucial for
corporate performance as branded industrial products can
provide firms with cash flow benefits and increased network
power (Hague and Jackson, 1994), while enhancing corporate
reputation and raising barriers to entry (Michell et al., 2001).
Such strategies can establish points-of-difference for
industrial firms that help reflect the offer’s economic and
functional features, including quality, reliability and
performance (Bendixen et al., 2004; Michell et al., 2001),
and salient intangible associations, such as expertise and
trustworthiness (Mudambi, 2002; Webster and Keller, 2004)
including a reputation for “being world class”, “technical
leadership”, and a “global presence” (Mudambi et al., 1997).
Furthermore, strategies to build brand image and company
reputation can enhance business customers’ perception of
product and service quality, and value thereby increasing
loyalty (Cretu and Brodie, 2007). As well, recent figures
(2006) identify that almost 21 percent of North American
business marketers are focusing primarily on building brand
awareness, up from 17.5 per cent in 2005 (Marketing News,
2006, p. 36).
Despite these promising signs, few authors have considered
what attributes business marketers can use to build a strong
brand identity. This paper addresses this issue, with reference
to the business-marketing offer developed by the IMP Group
(Ford et al., 2002), and several case examples. This paper has
the following structure. First, we examine the five elements of
the business-marketing offer, and identify how each element
can form the basis for a brand’s identity. We also then address
the viability of branding multiple elements. Second, we
identify boundary conditions for each brand strategy,
referring to the firm’s strategic positioning, the buying
decision, purchase type, and customer needs. Last, we
identify implications for future research and managers.

Journal of Business & Industrial Marketing

Branding the business-marketing offer
22/6 (2007) 394– 399
q Emerald Group Publishing Limited [ISSN 0885-8624] Research conducted by the IMP Group has identified five
[DOI 10.1108/08858620710780154] components to the business-marketing offer:

394
 Branding the business marketing offer
Michael Beverland et al.
1 product;
2 service;
3 logistics;
4 advice; and
5 adaptation (Ford et al., 2002).
These are presented in Figure 1. The business-market offer
consists of three core components that are often imitable by
competitors (products, services, and logistics), and two less
tangible components that are difficult to imitate, and reflect
the intangible capabilities of the firm (adaptation and advice).
Each of these components of the offer can form the basis of a
business-to-business brand’s identity (as can a combination of
the various elements of the offer). We explore these below.
Product
The first aspect of the business marketing offer and one that is
considered by some as the least important (Ford et al., 2002)
is the product. There are three ways to conceptualize the
product. First, the product can be thought of in terms of a
tangible “thing”. Few would recommend that marketers
simply brand the product at this level, given that the brand
will inextricably become associated with one narrow product
range, and suffer decline as obsolescence sets in. Also, in
business marketing, products hold no value in and of
themselves; rather they represent solutions or services for
customers (cf. Vargo and Lusch, 2004). This gives rise to the
second way of thinking about the product – the benefits the
product delivers to buyers. This form of product does offer
limited potential for brand identity because it is tied directly
to a consumer need. We believe two types of brands may
benefit from this brand identity: firms that sell high
performance products but offer little in the way of extra
services and adaptation, and ingredient brands.
The first type of brand consists of products that exhibit
demonstrable performance leadership over competitors, but
beyond this attribute, have little basis for meaningful
differentiation. These may be products whose buyers have a
high degree of knowledge of their needs, and the basis for
comparing one offer to another is known, and is quantifiable
(i.e. the points of parity and difference that matter to buyers
can be quantifiably demonstrated; Anderson and Narus,
2004). Also, these buyers may be classified as “intrinsic
Figure 1 Five components of the business-marketing offer
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Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 394 –399
buyers” who are motivated by the intrinsic performance
benefits of the product per se (Rackham and DeVincentis,
1998). Thus, the purchase decision is relatively simple, and is
likely to consist of a straight re-buy or a modified re-buy.
One likely product category for this form of branding is
agricultural commodities such as raw wool, milk, leather, and
input goods such as wine grapes. Another category would be
minerals such as iron ore, gold, diamonds, and uranium. In
both cases, absolute product quality matters (for example
mineral purity or quality, raw wool tensile strength or
fineness, leather quality, milk fat content, and grape sugar
content), but no other form of meaningful differentiation is
available to these sellers. Several instances exist here. For
example, The New Zealand Game Industry Board provides a
corporate brand to its leather hides. These hides are graded
on accepted criteria – softness and damage – and are then
purchased by tanners for further processing into material for
fashion, furniture, or automotive buyers. As such, their brand
identity is related primarily to product quality advantages.
The International Wool Secretariat’s Wool Mark brand is
another example of this approach, and in a sense attempts to
build a leadership position around product quality and assure
quality-sensitive buyers the product has met rigorous
standards.
Ingredient brands use a similar strategy. Consider Intel’s
“Intel Inside” campaign. Intel has built up a strong leadership
position in chips, and has a high level of brand awareness
among end-consumers as being the standard ingredient for
high quality PCs. Thus the brand identity is relatively simple
– the brand simply reassures buyers that the established
market leader’s key ingredient is included within the final
product. Again, the points of parity and difference that are
relevant to buyers are quantifiable and known. Although Intel
is moving beyond this single association between computer
chips and their brand (in an attempt to own more of the
motherboard), the brand in its current state has product
benefits at its core.
The third way to conceptualize the product is in terms of
product innovation or leadership. In this case, firms build a
brand identity around a reputation for innovation and
creativity. That is, rather than link the brand tightly to
product benefits, they link the brand’s identity to a firm level
capability – for example, the heavy earthmoving equipment
manufacturer Caterpillar (or CAT). Caterpillar have
developed a strong brand identity, and reinforced this with a
firm-wide corporate branding program. Although their brand
is associated with absolute performance standards and “hard
wearing” (durability), the firm has also built its reputation
around its ability to constantly update this technology through
carefully crafted new products and upgrades. Likewise,
software manufacturers typically brand around their
innovative capability given that gaining customers require
high-quality performance and a pipeline of upgrades and new
product launches. In contrast to customers for commodities
or ingredient brands, these customers are likely to face a more
complex buying decision, look for longer-term relationships
with key suppliers, focus more on the ongoing benefits from
product adoption, and have some meaningful points of
difference that are not quantifiable. Also, such brands consist
of products that are capital equipment or services (software)
rather than ingredient products or raw material inputs.
 Branding the business marketing offer
Michael Beverland et al.
Services
Services can take many forms. First, services can augment the
product. Second, suppliers may sell services rather than
products. Third, subcontractors may provide service
capabilities to customers. Services are often valued by
extrinsically oriented business customers – customers that
derive value from things that surround the product, such as
support services (Rackham and DeVincentis, 1998). Thus
although these customers may buy a product, they choose a
brand on the basis of the quality of support services provided
by the firm. In some cases, competing service offers may be
easily comparable in terms of meaningful points of parity and
difference.
For example, auditing services are now considered by many
accounting firms to be somewhat of a commodity because the
service provided is standardized, and (until recently) many of
the largest suppliers of such services had similar reputations
(levels of trust and standing with stakeholders), pricing
structures, and service standards (not to mention that
suppliers’ service representatives had the same level of
training and qualifications). Within market research, brand-
tracking services have the same commodity like status. In
these cases firms are likely to build their brand identity on the
basis of service quality leadership, firm reputation, staff skills,
and the friendliness and professionalism of their staff. To
reinforce this brand, these firms may use external
accreditation authorities such as ISO standards, industry
feedback in terms of service leadership (i.e. benchmarking),
and testimonials from satisfied customers (particularly high
profile customers).
In these cases, services are relatively standardized and in
many cases are proxies for products. Because such services
can be standardized, little customization is often necessary
(such as compliance services), or services can be customized
at a segment level (such as university travel provision), or
involve building to set customer specifications (such as
outsourced production). Thus, this form of branding is more
performance oriented and simpler than for brands that build
their identity around aspects of advice or adaptation.
Logistics
Logistics refers to more than just the delivery of the product
to the customer (this would be a service; see above). Logistics
refers to the ability of suppliers to manage their supply chain,
meet the demands of just-in-time production schedules,
minimize customer production disruptions, provide order and
material traceability, and the ability to cooperate with other
network partners in order to deliver offers to customers (Ford
et al., 2002). Logistics thus consists primarily of capabilities
rather than tangible things, and involves standardized and
customized components. Thus logistics is a more abstract
basis on which to build a business-to-business brand.
Firms that value this form of logistics are likely to be
customers that treat purchasing in a strategic way. For
example, they are likely to operate either a procurement
orientation (whereby customers focus on ways to minimize
the total cost of purchasing through relationships and
strategic management of suppliers) or a supply chain
orientation (where customers seek to leverage suppliers for
strategic benefits) (Anderson and Narus, 2004). These
customers may value the extrinsic elements of an offer, or
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be strategic value partners – customers who seek to leverage
supplier capabilities for competitive advantage, and thus value
longer-term relationships (Rackham and DeVincentis, 1998).
Retailers seeking to outsource category management to
category captains would be one customer responsive to this
form of branding.
One example of a business-to-business brand that builds its
identity around logistics is Merino NZ. Merino NZ is a
cooperative responsible for marketing New Zealand’s Merino
wool overseas. Responding to complaints from up-market
fashion buyers that pricing, supply, and quality were barriers
to buying this fiber, Merino NZ built their brand identity
around their ability to manage these buyers’ concerns. This
provided a form of differentiation that enabled them to break
out of the commodity price cycle and establish themselves as a
supplier of first choice. Breaking with past traditions, Merino
NZ acted as a facilitator between farmers and their
downstream customers (a vertical channel consisting of 11
different levels). This was often the first time different
network members had met one another, and by
communicating were able to understand how commodity
prices and supply uncertainty placed the entire network in
jeopardy. Therefore Merino NZ (in an industry first)
encourages farmers to sign five-year supply and price
contracts.
As well, quality uncertainty plagued the industry. First,
fleece quality – a critical factor for buyers (luxury cloth
suppliers required the finest quality fleece) – was historically
measured by “feel”, and therefore customers did not have an
accurate way of measuring product quality. As well, separate
fleeces were blended into a bale, resulting in widespread
quality variation within a bale, which meant customers often
had to buy more bales than they needed, seek out the finest
fibers, and on-sell the rest. Finally, wool was often bagged in
polyurethane bags. When polyurethane fibers inevitably got
intertwined with wool, the resulting cloth had white streaks in
it because polyurethane cannot take dye. Again, customers
had to over order to make up for this problem.
Merino NZ solved these problems in multiple ways. First,
they insisted that all fleeces be bagged separately on farms,
tagged, and tested for tensile strength scientifically. Thus,
customers could accurately judge quality, and order to exact
specifications. Also, there was greater traceability in the
system because customers could request fleeces from one
particular supplier, or even individual paddocks on farms,
while farmers could make informed on-farm improvements to
increase product quality. They also insisted all wool was
bound with twine, which can take dye. This ultimately set the
standard for the industry. A similar program formed the basis
of brand identity for the New Zealand Game Industry Board’s
Cervena program (Beverland, 2005).
Adaptation
Adaptation involves making changes to any element of the
offering following individual requests from customers (Ford
et al., 2002, p. 123). This is different to building customized
designs (this would be covered under product innovation and
leadership); rather it involves adapting a standard product or
service offer to meet individual buyer’s needs. In contrast to
the first two aspects of the business-marketing offer,
adaptation represents a firm level capability and thus is a
much broader and abstract attribute of brand identity.
 Branding the business marketing offer
Michael Beverland et al.
Adaptation is critical for buyers with complex needs, and for
large powerful buyers as research has identified the
importance to ongoing relationship satisfaction of managing
changes in customer desired value change (Beverland and
Lockshin, 2003; Flint et al., 2002). As with buyers for
logistics, customers seeking adaptation are likely to be
strategic value customers that value long-term relationships.
As well, these buyers are likely to purchase modified re-buys
or new purchases. Such purchases are likely to involve
significant risk and importance, and be central to the
customer’s ongoing performance. Suppliers of complex
services such as consulting, information technology, and
education, as well as product suppliers of heavy capital items
such as shipping, aircraft, and defense technology are likely to
benefit from this form of brand identity.
For example, many service providers of complex services
stress their ability to adapt a standardized offer to key clients.
IBM’s 2005-2006 Australian advertising campaign
emphasized its preparedness to listen and adapt its solutions
to the individual needs of business clients. Likewise,
Microsoft invested heavily in service support to provide
adaptive services to key customer groups such as developers
(Narus and Anderson, 2001). Infosys recently repositioned
itself along similar lines in order to capture greater value
(Narus and Seshadri, 2004). As well, aircraft manufacturers
such as Airbus and Boeing regularly adapt their aircraft to
take into account different cabin design requirements and
load specifications of major airlines.
Advice
Advice aims to increase the customer’s understanding (Ford
et al., 2002, p. 123). Advice helps decrease customer
uncertainties, and may identify new opportunities, the real
source of a customer’s problem, or new ways of doing things.
Advice involves adaptive selling and a two-way dialog between
buyers and sellers. As such, listening, problem solving, and
communication skills are paramount. Advice also involves a
mix of reacting to buyer demands and expressed needs, and
importantly, proactively offering new suggestions that will
benefit the customer’s competitive position or operation
(Beverland et al., 2004).
Buyers that respond to advice-led brands are likely to prefer
long-term relationships and seek partners to assist them in
enhancing their competitive advantage. These buyers will be
looking for suppliers that can offer advice on new
opportunities, and on process improvements that may
decrease the overall cost of purchasing (procurement
oriented buyers; Anderson and Narus, 2004). Advice is
similar to adaptation in that it is a capability (and thus a broad
abstract brand identity attribute), but differs in that it is
primarily supplier driven. Buyers seeking advice are looking
for suppliers that can offer credible solutions and suggestions
that seek to change the customers’ way of doing things.
For example, research indicates that advertising agencies
can increase their chance of renewal if they go beyond
adaptation and constantly offer well thought out and
researched suggestions for new campaigns and ideas
(Beverland et al., 2004). Similar opportunities exist for
market research agencies (several of whom have repositioned
themselves as consultants) and business consultants (where
adaptation of standard report templates has long been
considered a problem by buyers).
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Product suppliers can also adopt this form of brand
position. For example, Tasmania’s military ship builder InCat
manages its relationship with the US Navy in a proactive way
and communicates this to current and potential customers.
InCat’s role on one major order was to build helicopter-
landing pads for the US Navy’s fleet. They had established a
product leadership position in this area, but also noted that
the Navy had to regularly repaint the landing pads with rust-
proof paint because it was continually stripped off when
helicopters landed or moved on the pad. This was costing the
Navy millions of dollars per year. InCat tested a potential
solution to this problem that involved a slightly ribbed surface
on the top of the pad. Tests showed that the new surface did
not need regular repainting because the paint could grip the
grooves in the surface and was therefore more durable under
extreme conditions. Despite receiving threats from paint
contractors, InCat provided the solution to the Navy, who
quickly adopted it. Such a solution has helped InCat
continually win orders with military customers.
Discussion
While establishing a strong brand identity has become
synonymous with consumer products, it is only in recent
times that this concept has been recognized as being of benefit
and value to industrial goods. This study focuses on five
pillars underpinning brand identity in industrial markets,
namely product, service, logistics, adaptation, and advice, and
the conditions under which each should be adopted. In so
doing, we offer an alternate framework to Kapferer’s (2004)
brand identity prism, one that is structured around the needs
of industrial firms and their buyers (see Figure 1). For
industrial brands, a strong identity can be established based
around an individual element of the business market offer or
alternatively, built using any combination of the five
components. The latter situation may provide a brand with
a more flexible and adaptable positioning, which can readily
be modified to meet the needs of different buyer segments. As
such, this framework provides industrial marketers with a way
to conceptualize and construct a unique brand identity that is
difficult for competitors to imitate, meaningful and relevant to
business buyers and value-producing for both the firm and its
customers. However, additional research in this area is
required, particularly with respect to the effects of single
versus multiple brand identity pillars on the attitudes and
actions of industrial buyers.
This study also reveals that brand identity decisions should
be made with consideration to the type of customer utilizing
the firm’s products and services, as well as the type of buying
situation they face, which is illustrated in Table I. As a
customer’s level of involvement in a buying situation increases
and the purchase decision becomes more complex, the basis
on which brand identity is built shifts from the tangible,
product-related benefits of the business marketing offer to the
more intangible, abstract associations. Thus, industrial
marketers need to track the evolution of their customers’
needs and purchase requirements over time and ensure that
the prevailing brand identity reflects customer expectations.
This is consistent with Keller’s (1999) assertion that when
changes occur amongst a firm’s customers or competitors, or
when there are significant shifts within the firm itself, a
brand’s strategic direction and positioning may need to be
 Branding the business marketing offer
Michael Beverland et al.
Table I Matching brand identity with customer type and buying situation
Buying situation Intrinsic value buyers
Straight rebuy Product
Modified rebuy Product
New buy
altered in order to remain relevant to customers and be
sustainable in the longer-term.
Further research may be necessary to examine the
organizational processes involved in managing this evolution
and understanding the effect such changes has on industrial
buyer behavior. This also raises another issue with respect to
the capabilities a firm must possess to successfully construct
and implement a brand identity built around each of these five
pillars. Future research could be directed toward identifying
the organizational systems, structures, staff, skills, and
resources underpinning a firm’s brand identity strategy and
understanding how such issues constrain a firm’s approach to
branding.
This study also suggests that the decision of whether to
brand at the corporate or individual product level is closely
intertwined with the selection of a suitable basis on which to
establish brand identity. As brand identity becomes more
abstract – that is, emphasis is placed on the intangible
components of the business offer – it becomes necessary for
managers to draw upon a host of products and services from
within the firm to deliver upon the brand promise. Rather
than develop a separate identity for each of the individual
brands offered by the firm, it may be more effective to
establish these abstract associations at the corporate level and
leverage them across to individual products within the
portfolio. In doing so, a rich and robust brand identity can
be created that helps reinforce a firm’s position as a “solutions
provider” (Beverland et al., 2007). Future research may be
directed toward understanding the antecedents to the
development of a corporate versus individual product brand
identity in an industrial business context, taking into
consideration organizational, market, product, and
customer-related factors, and its consequences.
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Volume 22 · Number 6 · 2007 · 394 –399
Customer type
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Product/services
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Logistics Logistics/adaptation/advice
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 Branding the business marketing offer
Michael Beverland et al.
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About the authors
Michael Beverland is a Senior Lecturer in Marketing at the
University of Melbourne. He has published in Industrial
Marketing Management, Journal of Advertising, Journal of
Business & Industrial Marketing, Journal of Business Research,
Journal of Management Studies, Journal of Personal Selling and
Sales Management, and Journal of Product Innovation
To purchase reprints of this article please e-mail: reprints@emeraldinsight.com
Or visit our web site for further details: www.emeraldinsight.com/reprints
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Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 394 –399
Management. Michael’s research interests include customer
desired value change, branding and brand evolution in
business markets. Michael Beverland is the corresponding
author and can be contacted at: mbb@unimelb.edu.au
Julie Napoli is a Senior Lecturer in Marketing at the
University of Melbourne. She has published in Business
Horizons, Journal of Advertising Research, Journal of Business
Research, Journal of Small Business Management and
International Journal of Advertising. Julie’s research interests
include measuring advertising effects, brand management
across contexts and cultures and managing brand meaning.
Raisa Yakimova is a doctoral candidate at Monash
University. Raisa’s dissertation examines the capabilities
underpinning brand evolution. Raisa has published in the
Journal of Brand Management. Raisa’s research interests
include brand management, marketing implementation, and
brand repositioning.
 Sources of brand benefits in
manufacturer-reseller B2B relationships
Mark S. Glynn
Faculty of Business, Auckland University of Technology, Auckland, New Zealand
Judy Motion
Waikato Management School, University of Waikato, Hamilton, New Zealand, and
Roderick J. Brodie
University of Auckland, Auckland, New Zealand

Abstract
Purpose – The aim of the paper is to develop a conceptual framework that explores the sources of manufacturer brand benefits for resellers.
Design/methodology/approach – The paper reports a qualitative investigation where packaged goods resellers were interviewed about the benefits
of manufacturer brands for their businesses. The qualitative data is analysed to develop several research propositions about the role of brands in
reseller B2B relationships.
Findings – A conceptual framework is developed that shows that manufacturers’ brands provide financial, customer and managerial benefits for
resellers. These benefits have an impact on reseller relationship outcomes with the manufacturer’s brand, which include satisfaction, dependence,
cooperation, commitment and trust.
Practical implications – The conceptual framework provides a model that manufacturers of both major and minor brands can use to understand and
manage these brand benefits in order to enhance the relationship outcomes with resellers.
Originality/value – The paper responds to a need for empirical research to understand the role that brands play in channel relationships. It presents a
conceptual framework that links manufacturer brand benefits to reseller relationship outcomes. The framework also includes major and minor brands as
moderating variables and thus provides a basis for further quantitative research.

Keywords Brands, Business-to-business marketing, Buyer-seller relationships, Qualitative methods

Paper type Research paper

An executive summary for managers and executive
readers can be found at the end of this issue.
Introduction
There are many similarities between industrial purchasing and
reseller purchasing (buying by retailers and wholesalers),
because in both cases purchases are influenced by
organisational purchasing policy. Also, the magnitude of
purchases for both industrial buyers and resellers is large,
which results in considerable buying power. In recent years
the buying power of resellers has increased (Bloom and Perry,
2001), which has reduced the leverage of the manufacturer’s
brand with resellers (Shocker et al., 1994). The challenge for
manufacturers is to counter this reseller power by
differentiating their brands and developing relationships
with resellers (De Chernatony and McDonald, 1998).
However, the role of manufacturers’ brands for resellers is
not well understood in the B2B context because of the
“mistaken assumption” (Webster, 2000, p. 17) that brands are
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0885-8624.htm
Journal of Business & Industrial Marketing
22/6 (2007) 400– 409
q Emerald Group Publishing Limited [ISSN 0885-8624]
[DOI 10.1108/08858620710780163]
relevant only to consumer relationships and not reseller
relationships.
This article responds to Webster’s (2000) challenge to better
articulate how a manufacturer’s brand can provide benefits for
resellers within a B2B relationship where end-customers are
concerned. In this introductory section, we review the literature
on reseller purchasing and B2B relationships within channels.
In the following sections we outline the research approach, and
develop a conceptual model and research propositions. Finally
the managerial implications of the research are discussed and
conclusions drawn.
Within the industrial marketing literature, research initially
established whether brands were important in industrial
purchasing (Gordon et al., 1993). As with consumer
marketing (Keller, 2003), the focus has been on the brand
attributes and implications for brand management. Research
about the industrial buyer has identified attributes such as
“greater confidence in the purchase decision”, “enhanced
corporate reputation”, and “increased competitive advantage”
(Hutton, 1997; Michell et al., 2001).
However there are some important differences between
reseller purchasing compared to industrial purchasing. With
industrial buying the brand purchase becomes part of the
organisation’s production process, whereas resellers purchase
brands for immediate resale. Reseller purchasing not only
involves organisational considerations, but also recognition of
the end-customer needs (Fairhurst and Fiorito, 1990).
Reseller buying of brands is also more likely to directly
affect the reseller organisation’s competitive advantage,

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 Sources of brand benefits in manufacturer-reseller B2B relationships
Mark S. Glynn et al.
market and financial performance (Buchanan, 1992). In
addition, because of the size and buying power of many
resellers, a reseller’s performance can affect a manufacturer’s
success in the marketplace. A further difference between
industrial purchasers and resellers is the ability of
manufacturers to implement end-customer marketing
strategies through resellers (Beverland, 2005; Murry and
Heide, 1998). But as Ghosh et al. (1995) note, the
manufacturer’s ability to use end-customer marketing tools
through resellers, such as sampling and point of purchase
displays, often requires reseller cooperation.
A poorly managed reseller relationship can undermine the
value of a manufacturer’s brand (Lassar and Kerr, 1996). For
example a reseller’s decision such as the display of a brand in
store may affect a manufacturer’s brand equity (Buchanan
et al., 1999). Furthermore, a reseller could introduce a private
label brand to compete alongside the manufacturer’s brand
(Quelch and Harding, 1996). With industrial brand research,
the focus has also been on the purchase of a single brand
(Rosenbröijer, 2001). But, as Nevin (1995) points out,
resellers also purchase competitor’s brands for resale within a
category.
In much of the retail buying literature the brand is often
indirectly assessed using surrogate measures such as product
uniqueness and product quality. The few studies that directly
consider brand effects have produced mixed findings. Rao and
McLaughlin (1989) found that branding was just one of
several factors affecting retailer buyer attitudes. Collins-Dodd
and Louviere (1999) showed that brand equity influenced a
reseller’s acceptance of a brand extension, but did not affect
pricing or promotion decisions. Baldauf et al. (2003) in their
study of tile resellers showed that brand equity (awareness,
quality and loyalty) explained some of the variance in brand
performance perceptions, but found that other factors such as
price, competition and expenses were important as well.
These studies, however, have not addressed the impact of a
brand’s market share on reseller brand buying. Anselmi
(2000) showed that the relative market share of a brand did
have an effect on the long-term relationship with distributors
and could influence manufacturer advertising allocation
decisions. Major brands are also less price elastic (Bolton,
1989) but minor brands benefit more from trade promotions
(Hoch and Deighton, 1989). Resellers tend to pass on to their
customers a greater proportion of manufacturer promotional
allowances for major brands compared to minor brands
(Blattberg and Wisniewski, 1989).
The value of a brand to the end-customer is a joint result of
manufacturer and reseller decision-making (Anderson and
Narus, 1998) and is best optimised through a partnership.
Resellers and manufacturers seek channel partners with
strong market power to achieve their respective strategic goals
(Kasulis et al., 1999). Resellers endeavour to maintain
profitability in the face of consumer demand for better value
through larger ranges, larger store formats, competitive
pricing and private label brands. However, the reality of
retailing is that it involves a network of manufacturers,
resellers and end-customers (Anderson et al., 1994). Thus,
resellers deal with many manufacturers and these
manufacturers also supply a reseller’s competitors
(Holmstrom, 1997). Within the network, the brand is a
resource tie that links manufacturers and resellers together to
serve the end-customer (Ford et al., 1998). Anderson and
Narus (1998) coined the term “marketplace equity” to
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describe how these resource ties (brand, channel and reseller
equity) link manufacturers, resellers and end-customers
together.
The resource-based view of the firm (RBV) is a theoretical
framework that underlies these ideas about marketplace
equity and inter-organisational relationships (Srivastava et al.,
2001). Within the RBV, brands are intangible or market-
based assets that create competitive advantage for firms.
Market-based assets enable firms to create shareholder value
from interactions with organisations or entities that it does not
control, such as end-customers and channels. Relational
market-based assets are relationships associated with external
processes such as supply chain management and customer
relationship management.
Research has highlighted the importance of external
relationship outcomes such as cooperation (Jap, 1999),
satisfaction (Cannon and Perrault, 1999), commitment
(Ganesan, 1994) and trust (Hoyt and Huq, 2000).
However, this research does not include the brand as a
resource within these external relationships. To optimise
resources such as brands within B2B external relationships,
manufacturers need to be aware of the governance
mechanisms at work (Heide, 1994). Ghosh and John (1999)
identified the impact of governance types and firm resources,
including brand equity, on the outcomes of a business
relationship. They showed that resources such as brand equity
have a different impact on firm performance, depending on
the governance strategy that is used. Firms with brands that
have strong brand equity with the end-customer can better
use market governance. However, it may be more
advantageous for firms with minor brands to use relational
governance and form partnerships with resellers. Combs and
Ketchen (1999) confirmed this point when they found that
restaurant chains with a lower brand name reputation were
more likely to engage in inter-organisational cooperation as
they had fewer resources.
While research now recognises the importance of branding
in a business-to-business marketing, there is still an
assumption of a single-stage linkage from the manufacturer’s
brand to the end-customer. Brodie et al. (2002) noted that
research has not addressed brands as sources of value in inter-
organisational relationships. Many brand researchers regard
the role of resellers as being one of support (Keller and
Lehmann, 2002), with little recognition being given to the
cooperative and partnership aspects of manufacturer-reseller
relationships. Consequently the effect of these aspects on
reseller attitudes and behaviours towards manufacturers’
brands is unknown.
This review of the literature leads to three research
questions:
1 What are the benefits of manufacturer brands for
resellers?
2 What are the important reseller relationship outcomes
from manufacturer’s brands?
3 How do manufacturer brand benefits influence
relationship outcomes for resellers?
Research method
The research context selected to investigate these questions
was the B2B relationship between brand manufacturers and
retailers. The New Zealand packaged goods retail sector was
selected as the relevant population where these established
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Mark S. Glynn et al. Volume 22 · Number 6 · 2007 · 400 –409

B2B relationships could be studied (Beverland and Lockshin,
2003). Packaged goods brands have also been the focus of
much branding research (Grime et al., 2002) and are
theoretically relevant to the research problem (Yin, 1994).
To ensure that the findings were not limited to a particular
group of resellers, a cross-section of participants from the
grocery and liquor retailing sectors were selected, following
the approach of Manning et al. (1998). Key reseller
informants consisting of retail buyers and store managers
were sampled because they had more frequent interaction
with manufacturers. These individuals were not only
knowledgeable about brands in retail channels; they also
provided richer perspectives from different organisational
levels, for example a store manager versus a merchandise
manager from head office. This selection of informants
ensured that “maximum variation” was obtained (Yin, 1994).
Care was also taken to interview personnel from competing
retailers, for example Foodtown and New World compared to
Pak ’n Save, which was a limited service, everyday low price
retailer as well as from different liquor retailers. Table I
depicts the participants, their job titles and the reseller trading
characteristics.
In-depth interviewing was chosen because it allowed the
impact of manufacturer’s brands to be explored in terms of
the reseller’s channel experience. A semi-structured interview
protocol was used, consisting of pre-determined open-ended
questions. The reseller-informants were asked to discuss the
activities and issues for manufacturer brands in terms of their
business operation. Resellers then commented on their
relationships with manufacturers on matters concerning
brands and were asked to explain and interpret the possible
influences on these relationships. The interview protocol is
presented in the Appendix.
During May to November 2001, eight reseller informants
were interviewed. The interviews were conducted on-site
(lasting approximately one to one-and-a-half hours) by the
same interviewer to reduce bias. Data collection ended when
theoretical saturation was reached (Yin, 1994). The
interviews were then transcribed verbatim and the
transcripts returned to informants to check the transcription
accuracy. In addition, the interviews were also supplemented
with information from a trade publication, the Nielsen
Information Digest (Nielsen, 2001), which provided the
researchers with data on the size of the grocery and liquor
sectors, store listings and names of key personnel in the
industry. This publication also contained an overview of the
retail trends in 100 product categories, together with a
ranking of each brand within the category.
At the time of the research three major resellers –
Foodstuffs, Foodland and Woolworths – dominated grocery
retailing in New Zealand. Foodstuffs is a cooperative retail
chain consisting of independently owned outlets. The retail
chains controlled by Foodstuffs included New World, Pak ’n
Save and Four Square. Foodland owned the Foodtown and
the Countdown chains and was itself a subsidiary of Foodland
Australia. Woolworths controlled the Woolworths and Big
Fresh chains and was part of Dairy Farms, a Hong Kong
based firm. The liquor industry consisted of two major
national retail chains, Liquorland and Liquor King and some
smaller chains such as Glengarry. In 2000 the grocery sector
turnover for New Zealand was $US20 billion. Comparable
figures for the liquor sector were not available; however, there
were 668 outlets in liquor retail compared to 2,760 grocery
retail outlets (Nielsen, 2001).
A thematic approach (Zorn and Ruccio, 1998) was used to
code the data and generate meaning. This open coding was
independently verified by an expert panel of the principal
researcher’s academic peers (Strauss and Corbin, 1998).
Salient themes were then developed from the identification of
key words, phrases and quotes based on the language of the
participants. A salient theme had to be recurrent (frequency),
occur in at least 75 per cent of interviews and be relevant to
the research questions. The subsequent analysis of the coding
was then compared to the literature (dialectical tacking). For
example, from the literature on sources of power in reseller
relationships, important aspects of manufacturer’s value for
resellers were identified (e.g. Kasulis et al., 1999). The data
was then reappraised, resulting in the identification of the
brand benefits for resellers.
To ensure the trustworthiness of the data key interpretive
and grounded theory research criteria were applied:
.
credibility;
.
generality;
.
transferability;
.
dependability;
.
confirmability;
.
integrity;
.
understanding; and
.
fit (Flint et al., 2002).
The following procedures indicate that each of these criteria
had been met. First, to ensure credibility and generality,
interviews were conducted and audio-taped over a seven-
month period, with two researchers giving input into the data
analysis. Before the analysis commenced, the principal
researcher read a printout of each interview and then
developed a thematic coding scheme based on the literature
and analytical memos from the interviews. Another coder, an

Table I Details of participants

Reseller Chain(s) Retail type Number of stores Trading aArea Job title Reseller code
Foodstuffs Auckland New World Supermarket 42 Auckland Category buyer SC
Merchandise manager SM
Pak ’n Save Discount supermarket 19 Auckland Store Manager SS
Woolworths Woolworths Supermarket 57 Nationwide Retail Director RD
Foodland Foodtown Supermarket 29 North Island Category buyer CB
North Island Merchandise manager MM
Liquorland Liquorland Liquor 76 Nationwide Merchandise manager LM
Glengarry Hancock Glengarry Speciality liquor 12 Auckland/Wellington Store manager GM

402
 Sources of brand benefits in manufacturer-reseller B2B relationships
Mark S. Glynn et al.
expert colleague of the researcher, verified this coding
scheme. Second, to aid transferability, theoretical sampling
was used. The sampling from the grocery and liquor sectors
ensured the findings were not biased towards one retail sector,
type of retailer (full service compared to low everyday pricing)
or a particular level within an organisation. Third,
dependability was evident in the consistency of response
across both retail sectors and the organisation levels sampled.
In addition, the principal researcher conducted all the
interviews to maintain this consistency. Fourth,
confirmability was verified by checking printouts of the
transcriptions against the original audiotapes to ensure the
wording and meaning had been accurately transcribed. Where
the tape was unclear, the participants were re-contacted by
phone to clarify the relevant section of the transcript. These
clarifications were mainly concerned with the brand names
and the industry jargon used. The comments of resellers were
also checked against the Nielsen Information Digest to identify
the market share of the brands mentioned. Fifth, integrity was
maintained by conducting the interviews in a non-threatening
manner and providing informants with an information sheet
explaining the purpose of the study. Sixth, the transcripts were
then forwarded to each of the participants to confirm the
accuracy of the transcription and the correct understanding of
their comments. As a further verification check, a report of
the findings was sent to each of the participants for further
comment. Finally, the fit of the study, which reflects whether
the findings match the area under investigation, was
addressed through the steps taken to establish credibility,
dependability and confirmability (Flint et al., 2002).
Findings
This section presents the findings for the three research
questions. The financial and non-financial benefits are
identified followed by the key relationship outcomes for
manufacturer’s brands. These relationship outcomes are
satisfaction, commitment, trust, dependence and
cooperation. Finally, how these sources of brand benefits
affect reseller outcomes is discussed.
Financial benefits of brands
The first theme reflected the financial outcomes from selling a
manufacturer’s brand and participants commented on profit
margins, price reductions and price premiums. Participants
considered that the main financial benefit for resellers was to
provide a good margin, which is implicit in the manufacturer-
reseller trading relationship. In a representative example one
reseller commented:
It’s usually in basic gross margin. The reality is that a brand will not be
ranged, where it’s only going to sit at number three or number four. If its
profitability is not 5%-10% more than the number one or number two
brand, because we have no reason to want to sell a product when number
one and number two can offer us the sales (Source: MM).
This quotation identifies the importance of margins and the
link to the brand ranking within the category. The financial
benefit of a potential brand was also assessed in relation to the
sales volume of the current offerings in the category. Resellers
then commented on how pricing affected margins and sales
volume.
Resellers reported that low pricing often altered consumers’
expectations so that a return to “normal pricing” resulted in
decreased sales. One reseller commented:
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In the South they got themselves into stupidity pricing with bread for
example, in some cases, at 99 cents. We are $2.49 on promotion for a loaf of
bread and you can’t get out of negative margin. Takes long, long time to get
out of it. So before we jump, we are very, very cautious and conscious of
what we need to be evaluating. We’re the leaders long term. We are
protecting brands too in that sense (Source: SM).
This reseller highlighted the negative financial benefits that
can occur for some price reductions and the impact on the
reseller’s business in the long term. The comment also
signalled the potential benefits of responsible reseller pricing
for the brand manufacturer. In the packaged goods sector,
resellers ultimately determine the retail pricing for consumer
brands. In contrast to price reductions, resellers also
discussed taking a price premium for a brand.
Premium pricing was associated with higher status brands,
minor brands and particular variants in the brand’s range. For
instance, manufacturer brands could have different price
points in the category, depending on the brand’s position
within the range. Resellers mentioned selling one brand
variant at a low price point while leaving other variants in the
range at a premium price point (Bergen et al., 1996):
There are some stronger wine brands you must have, Oyster Bay to a certain
extent, Lindauer you must have but I would rather sell Lindauer Special
Reserve or Deutz as they more profitable overall (Source: LM).
The reseller benefited first by attracting customers by selling the
Lindauer variant at a low price and second having an
opportunity to sell either the Lindauer Special Reserve or
Deutz (from the same supplier) at a higher price. A brand’s
variants could therefore offer resellers a means to improve
financial returns, based on a brand’s price elasticity of demand.
Customer benefits of brands
Resellers have to balance the need to optimise profit within
the category with satisfying the demands of their customers
(Broniarczyk et al., 1998). The next theme reflected reseller
comments on the requirement to satisfy the overall demands
of their customers and it was frequently mentioned that major
brands fulfilled this role for them. Resellers focused on the
needs of the customer in this theme rather than any
operational considerations as the following comment showed:
Brands are actually what they [manufacturers] do, whereas we retail. And we
try to meet the needs of our customers and buy whatever they really want
and of course. If we’re looking at our products, we also look at the total
market to see what we’re missing out on. We make sure that we’ve got all the
top selling lines, so we don’t just look internally, at our own range we look
outside and benchmark against other ranges, make sure we’ve got the top
lines (Source: SM).
This statement emphasised the importance of satisfying
customer demand including an assessment of brand
availability and how this compared to their competitor’s
offerings. The next statement reflected the customer
expectations that resellers would have a particular brand in
their range:
Some brands like vitamins and health supplements things of that nature, we
do quite well in that particular market because our [retail] brand used to
appeal to an older shopper but its now actually a lot wider range of
customers so our brand does quite well with that. Whereas perhaps not with
carbonated beverages because these are aimed at a much younger market. It
[the category] does not quite fit with our brand as well. It still fits with our
brand and its definitely part of our product mix but we might not do quite as
well with that particular category. So therefore those brands may not do
quite as well (Source: SC).
This reseller not only commented that the brand assortment
reflects the customer profile but also indicates the likely
 Sources of brand benefits in manufacturer-reseller B2B relationships
Mark S. Glynn et al.
consequences for a brand’s performance both within the retail
chain and for the manufacturer.
Managerial benefits of brands
Managerial benefits reflected the benefits of manufacturer
brands to enhance the operational aspects of the reseller’s
business, excluding the financial or the reseller’s customer
benefits. The key themes identified were the manufacturer
development within the category, brand support, support of
the reseller’s promotional programme and other areas of
collaboration such as the sharing of manufacturer brand
expertise. Resellers regarded manufacturer product
development as a long-term benefit:
Frozen foods for many years were in decline because there was no
development, no innovation, so the market shrank. Now as soon as suppliers
started innovating and bringing new ideas and a lot more support to those
categories of frozen foods. The categories started taking off, so I suppose as
retailers we don’t really drive categories, we sell them and we keep in line
with basically the rest of the market, but it’s very difficult for us to innovate
(Source: MM).
Although resellers regarded innovation within the category as
beyond their expertise, they were prepared to support the
manufacturer’s marketing activity. Lack of manufacturer
support was also viewed as detrimental in terms of
maintaining market size and the interests of the end-
customer. Brand advertising was another area that was
regarded as being beneficial for resellers:
It’s very important to have the right marketing, the right advertising
programmes behind it, rather than just price discount and the promotional
support behind it; it actually creates awareness and people wanting the
product (Source: SC).
This comment shows that the manufacturer’s brand
advertising support also had benefits for the reseller in
terms of pricing and margins. The brand’s marketing mix was
perceived as a necessity by resellers who commented that a
brand “rarely sells by itself”:
You’ve got to actually have that marketing pull, before it actually sells in the
stores. It’s actually really rare that you can just put something on a shelf and
expect it to sell. Customers need to be told about it, they need to be
educated, they need to understand what’s sitting on the shelf. Every product
I can think of that has just sat on the shelf, has gone within three months. So,
there needs to be some support (Source: MM).
While this comment highlights the role of manufacturer brand
support in terms of the end-customer’s brand knowledge and
the consequent benefit for the reseller, it also emphasises
other reseller benefits such as better inventory turnover.
Resellers’ store promotional programmes to generate
customer traffic were important and manufacturers were
expected to contribute to these promotional programmes.
This reseller stated the expectations of manufacturer support:
Our in-store promotions, every product would have a promotion at least once
or twice a year. That they pay for, that we organise internally. There is also an
expectation that Cold Power versus Surf [laundry powder] promotions for
example should be relative to their market share (Source: CB).
Resellers considered this type of support from manufacturers
was a necessity and that the manufacturer’s cooperative
advertising payment was tied to the brand’s market share. The
manufacturer’s sales force also provided product assistance in
the form of shelf layouts and the sharing of market
information. Despite the availability of scanner-based
market information for resellers, they often relied on the
manufacturer for the interpretation of market trends and also
collaborated with manufacturers to optimise store shelf
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layouts for a brand. One reseller explained the boundaries
between manufacturers and resellers this way:
We try to have as much correspondence as possible with suppliers over shelf
placement. We don’t ever proclaim to be experienced in the category,
although we’re experts at retailing. The suppliers know far more about the
categories and how consumers behave within a category, than we will ever
do, so they’d be the experts before we will ever be. However, it’s our stores
and our objectives become number one, which is a combination of
profitability, the proprietary brands within the category and our desires for
our corporate brand product (Source: CB).
This comment indicates a reliance on the manufacturer’s
expertise, but also that resellers use this information in
conjunction with their corporate goals as part of their overall
decision making.
Reseller relationship outcomes
The following relationship outcomes (Wilson, 1995) were
identified in 75 per cent of the interviews, satisfaction,
performance, cooperation, dependence, trust and
commitment. Reseller satisfaction with the manufacturer’s
brand is an important construct in the channels literature
(Geyskens et al., 1999) and was a key theme in this study.
Coding for this theme reflected the consequences of the
reseller relationship with manufacturers in terms of the brand.
The coding concentrated on the realised brand benefits and
differed from the financial benefits theme, which addressed
potential margin benefits. One reseller gave this example:
Very small suppliers, like Lisa that knew nothing, but she was very
approachable, learnt very quickly, understood what needed to happen and
worked with us and we sort of said to her, we’re only putting your product in
a couple of stores to see how it goes. And she made sure that it went into
those stores, that it was well looked after, that everything that could possibly
increase the sales, were done in those stores, so it worked really well. So we
put it in more stores, and now she’s extremely successful, but she’s still only a
relatively small business, in a very niche market, but the brands are very good
(Source: MM).
This comment illustrated the manufacturer’s efforts to
achieve the reseller’s satisfaction and how the reseller
responded to that input. Thus two aspects of satisfaction
were identified:
1 the overall channel sentiment, “how well things were
going”; and
2 references to tangible measures such as sales.
A level of reseller commitment to the brand is also evident
here.
Commitment is the desire of the reseller to continue with
the brand as part of its range. The following example
illustrated a reseller’s commitment when there was a benefit
for their business:
Heineken beer is doing a reasonably large promotion with the Tennis Open.
We extended that promotion, so guaranteeing Heineken display space in the
premium area (Source: LM).
Here the reseller took advantage of a brand’s sponsorship
activity. In this instance, the reseller committed in-store space
in a key area and secured a benefit for the manufacturer.
Trust in the manufacturer on matters concerning the brand
was the next relationship theme. Reseller trust reflects the
belief “that its needs will be fulfilled in the future by actions
taken by the manufacturer” (Anderson and Weitz, 1992,
p. 312). Reseller trust focused on the reliability of brand
supply as well as fairness and honesty, particularly when
manufacturers dealt with competing resellers. One reseller
summed up the issue as follows:
 Sources of brand benefits in manufacturer-reseller B2B relationships
Mark S. Glynn et al.
You can have a company with a very big brand that you could never imagine
ever stepping outside the bounds of a deal or giving this retailer more than
that retailer, but God help them if we found out that they did (Source: CB).
Consistency in trading terms and discounts offered was
expected and resellers monitored the promotional
programmes of their competitors to ensure that
manufacturers were being honest. In terms of supply
reliability, “out of stocks” was a concern for resellers,
particularly with major brands:
It’s important that we have a 100% distribution and a 100% supply at all
times. Sometimes we don’t for example with a Cadbury product recently a
number of individual variants of a chocolate bar had not been supplied. They
happen not to be the biggest sellers but it does create problems in the store
because they start to lose space on shelves and there is a detrimental effect to
sales (Source: SC).
If a manufacturer could not maintain supply of a particular
brand variant, even a minor line, this affected the reseller’s
business as well as the brand’s presence at point of purchase.
Trust in the manufacturer’s brand also highlighted the
implicit inter-dependence between manufacturers and
resellers. Dependence has been defined within the literature
as the degree of difficulty the reseller would have in replacing
the brand with an equivalent. However, resellers needed
manufacturers to supply more than just the brand. The
additional benefits such as category innovation and
promotional support were evidence of a broader
dependence on the manufacturer’s brand:
So we rely heavily on the manufacturer to supply the product, to give us
money to do some special prices for the customer, and be able to contribute
to our advertising (Source: SC).
Implementation of pricing deals and the reseller’s advertising
programme also reflected a high level of supply chain
coordination between manufacturers and resellers.
The next theme was cooperation: a coordinated action
taken by the firm to achieve mutual outcomes with expected
reciprocation over time (Anderson and Narus, 1990). To
remain competitive with other resellers and satisfy consumer
demand, resellers needed to cooperate with manufacturers to
fully utilise the potential benefits that brands offered:
An example of what we’re actually doing working with suppliers in a national
promotion compliance programme which goes by category and we give
displays, number of displays per unit etc. So working with key brands, the
brands actually get their opportunity within the key parts of our promotional
displays within the stores. That’s working with suppliers to actually to do that
because it’s an investment on their side. There is actually a cost [to the
reseller] in terms of additional stock, but there is maybe an opportunity for
us (Source: LM).
Resellers were willing to cooperate with brands to build store
traffic and sales volume. This comment recognised the
manufacturer’s brand investment and a need to maintain
fairness with all brand manufacturers by offering them business
opportunities. The desire to maintain satisfactory long-term
relationships with brand manufacturers was also evident.
Manufacturers’ brand benefits and reseller relationship
outcomes
This section focuses on the third research question which
considers how the sources of manufacturers’ brand value
affected key reseller relationship outcomes. The findings from
this research question confirm that both major and minor
brands could be influential in manufacturer-reseller
relationships.
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Major brands enabled retailers to fulfil their financial
objective through price reductions that generated sales
volume. In contrast, minor brands had to offer a better
margin benefit to obtain a store listing and generate better
sales value. Reseller commitment to a major brand could also
mean offering additional business opportunities to that
manufacturer:
Bigger brands are more important to us; therefore we’re more likely to give
these suppliers prompt appointments and better promotional weeks (Source:
CB).
The next set of manufacturer brand benefits was less tangible
and related to developing the product category, the sharing of
market intelligence and generally enhancing the reseller’s
productivity. For instance, organising promotions meant that
the reseller needed to cooperate with a manufacturer and
commit further resources such as purchasing additional
inventory for a store promotion. Customer demand for a
brand also helped maintain reseller commitment:
Kim Crawford [brand], an up and coming winemaker, doing exceptionally
well and tripling the amount of wine every year, for a place like us we need to
be able to keep up with that (Source: GM).
In this instance, commitment to this brand also meant
ensuring that they did not lose brand sales to other resellers.
In contrast, some resellers were wary of a major brand
becoming too dominant, preferring to have more inter-brand
competition within a category. Minor brands had a valuable
role too, as these often provided the variety for customers in
the store assortment. A minor brand was often considered a
source of countervailing power to the major brand:
To a degree, they are just as important from our point, because they keep the
large brands honest. So even though we really want to sell Persil, the Bio
brand is just as important in some respects, because he’s probably offered us
greater profitability (Source: CB).
This comment reflected the reseller’s desire to maintain the
major brand but also highlighted the minor brand’s margin
advantages for this category. One reseller mentioned giving
smaller brands a chance to build their business with their
organisation, but that some major brand manufacturers
sometimes had a passive attitude to the reseller relationship:
Quite often market leaders sometimes can be complacent. They can assume
they’re going to get sales without rewarding the customer on prices and
various things like that. So we quite often back the second or third tier
brand, and bring them up to such a point where they go the extra mile in
forming the relationship and doing things for the customer and doing things
for the store. Then obviously they’ll reap the benefits from us doing things
with them (Source: SS).
This comment showed how a reseller might view the market
leader if there was unsatisfactory manufacturer support.
Minor brands can benefit in this situation and the reseller also
emphasised the need for manufacturers to provide customer
benefits.
These three sources of brand benefits influence relationship
outcomes and this theme is echoed in the wider literature, for
example the market-based assets framework (Srivastava et al.,
2001) and the governance value analysis of Ghosh and John
(1999). Ghosh et al. (2004) also showed that distributors
expected financial benefits for their business as well as
differentiation benefits, which reflected end-customer and
product aspects in a B2B relationship. In addition, the
merchandise buying literature showed a broad link from
manufacturer resources to reseller satisfaction (Biong, 1993;
Ruekert and Churchill, 1984).
 Sources of brand benefits in manufacturer-reseller B2B relationships
Mark S. Glynn et al.
Resellers are required to assess how well a brand is
performing in relation to decisions about the reseller’s
customers, promotional programme and store layout. These
decisions often involve a reseller commitment, such as
purchasing additional product volume for a store
promotion. Satisfaction with the manufacturer’s brand can
lead to more reseller trust and commitment towards the brand
and creates dependence on the brand and cooperation with
the brand manufacturer on matters concerning the brand.
Furthermore, manufacturers of minor brands have the
opportunity to increase their business with resellers when
there is dissatisfaction with the brand leader.
Implications and conclusions
The findings lead to a set of propositions (outlined below) and
a conceptual model, which is shown in Figure 1.
A key finding is that there is a range of benefits that
manufacturers’ brands offer resellers other than the brand
name itself. These brand benefits have been depicted in the
conceptual framework as antecedent variables. The five
propositions related to this framework are now outlined.
The first three propositions indicate the types of brand benefit
that are relevant for resellers. The fourth proposition shows
the impact of these brand benefits on reseller relationship
outcomes associated with the brand.
P1. Reseller relationship outcomes for a manufacturer’s
brand are optimised when resellers fully utilise the
financial benefits associated with that brand such as
pricing and margins.
P2. Reseller relationship outcomes for a manufacturer’s
brand are optimised when there are high levels of
managerial benefits, including category development,
consumer brand support, support of the reseller’s
promotions and marketing expertise associated with
that brand.
P3. Reseller relationship outcomes for a manufacturer’s
brand are optimised when a reseller successfully meets
the end-customer demand associated with that brand.
P4. Reseller relationship outcomes for a manufacturer’s
brand are optimised when resellers fully utilise
combinations of the financial, managerial and
consumer benefits associated with that brand.
Figure 1 The benefits of manufacturer brands to resellers framework
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As customer considerations were important to resellers, the
findings show that brand market share can influence the
reseller relationship outcomes. Thus major and minor brands
have a role within the manufacturer-reseller relationship and
have been included in the framework as a moderating variable
(Baron and Kenny, 1986).
P5. A brand’s market share will moderate the effect of the
manufacturer brand benefits on reseller relationship
outcomes.
Managerial implications
To date, the relationship outcomes of manufacturers’ brands
for resellers have not been fully examined in the literature. A
primary contribution of this paper is the identification of a
range of range of benefits that manufacturer brands offer
resellers. These benefits involve not only a linkage between
manufacturers and resellers, but also include the end-
customer, who is the focus of both manufacturer brand
support and reseller marketing (Webster, 2000). The first
brand benefit is financial and while all suppliers potentially
offer this benefit, its realisation depends on how well the
reseller utilises the pricing and margins associated with the
brand. The second brand benefit focuses on how resellers use
the manufacturer resources to support the brand to manage
their business. Manufacturers provide supporting resources
for their brands such as category development, brand
advertising, support of the reseller-promotional programme,
brand information and expertise. The third brand benefit is
concerned with the reseller’s customer and relates to the
customer’s expectations of the reseller in terms of the
assortment and the brands themselves.
Manufacturers are concerned with the strategic value of
brands and recognise that good relationships with resellers are
necessary in realising the value of the product offering (Narus
and Anderson, 1988). The next implication from this study is
that these “sources of brand benefits” influence the
relationship outcomes for resellers. These brand benefits can
enhance a reseller’s satisfaction, trust and commitment to the
brand. Within this interdependent relationship, resellers also
need to cooperate with manufacturers to realise these benefits.
By focusing on these brand benefits to resellers,
manufacturers can enhance a buyer-seller relationship and
 Sources of brand benefits in manufacturer-reseller B2B relationships
Mark S. Glynn et al.
use their market-based assets to obtain a competitive
advantage.
In terms of the manufacturer-reseller relationship, brands
are regarded as market-based assets by resellers. Dyer and
Singh (1998) considered that these types of assets can be
shared between organisations and create relational rents from
relationship specific assets, knowledge sharing,
complementary resources and governance. While
manufacturer’s brands are not idiosyncratic investments
(Anderson and Weitz, 1992), they are relationship-specific
in one sense because resellers cannot suddenly switch from
one brand to another because of end-customer demand.
There is also substantial knowledge exchange between
manufacturers and resellers of market information and
category expertise.
The branding literature traditionally focuses on the building
of major brands through marketing communication (Aaker,
1991). This study demonstrates that minor brands are also
very important to resellers not only in terms of the
assortment, but in countering the strength of major brands
within the product category. The findings also show that in
the packaged goods sector brands are a key part of the B2B
relationship between manufacturer and reseller. Moreover,
resellers too have an active role in brand management, rather
than just being one of passive support.
Directions for future research
The first task for future research is to provide empirical
support for the propositions developed in this article. First,
the sources of brand benefits need to be measured to allow the
relative weighting of these brand benefits to be gauged.
Second, the impact of each of these brand benefits on
relationship outcomes should be tested within a structural
model. Third, the strength of the brand is an important
moderating variable within the model. To improve the
generalisability of such findings, the framework can be
applied to other types of industrial purchasing where brands
are the focus of the relationship. One example is where
industrial purchasing involves brands that already have a
consumer market (e.g. office supplies). Another relevant B2B
context includes the supply of branded OEM ingredients,
products or services to manufacturers. Both of these
purchasing decisions involve firms assessing the benefit of
manufacturers’ resources together with the end-customers’
expectations.
Conclusion
Business-to-business branding research has focused primarily
on the industrial buyer, but has not considered resellers. This
paper has examined what benefits manufacturer brands
provide to resellers. These benefits not only reflect a
manufacturer’s brand name strength, but the additional
resources associated with the brand such as advertising,
promotional support and category development. The findings
showed these brand benefits are valued by resellers and
influence several relationship outcomes. This broader
perspective of manufacturer brand benefits is consistent
with the antecedents of relationship outcomes previously
established by Biong (1993) and Cannon and Perrault
(1999).
An assumption in the literature has been that brand
strength automatically leads to “trade leverage” with resellers.
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Volume 22 · Number 6 · 2007 · 400 –409
This assumption had been previously challenged by both
Ghosh and John (1999) and Combs and Ketchen (1999).
This research investigated multi-brand purchasing of major
and minor brands, unlike previous business-to-business
research, which addressed single-brand purchasing
decisions. Evidence from this study shows that minor
brands can be beneficial in helping resellers manage multi-
brand purchasing for a product category.
A conceptual framework and research propositions
presented in this paper allow the impact of brands to be
tested empirically within reseller B2B relationships.
Furthermore, major and minor brands have also been
included as moderating variables. Manufacturers should
consider how the benefits associated with the brand can
better build reseller relationships and enhance the standing of
their brands with the end-customer.
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Appendix: Interview protocol, resellers
Questions:
1 What product categories are you responsible for? Tell
me a little about your experiences with manufacturer
brands?
2 Within these categories what benefits do you think
manufacturer brands have?
3 What aspects of manufacturer brands are important to
you, and/or the retailers? Do you think there is a
difference between your company and manufacturers in
emphasis on what is important as far as brands are
concerned?
4 How would you describe the business relationship your
firm has with brand manufacturers?
5 What aspects of this relationship are important? Can
you give me any examples?
6 In what ways do brands influence this relationship?
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409
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 400 –409
7 What aspects of this relationship do you think may have
enhanced manufacturer brands? Please describe some
instances where this may have happened.
8 Are there aspects of this relationship that may have
harmed manufacturer brands? Can you again describe
some instances?
9 Thinking about other competing brands in the product
categories you are involved with, how do they influence
the relationship you have with a particular
manufacturer?
10 How important are manufacturers’ brands in helping
you meet the corporate goals?
11 How important is the brand’s relationship with your
customers?
12 To what extent do you collaborate with manufacturers
to enhance your business?
About the authors
Mark S. Glynn is Senior Lecturer Marketing and Advertising
in the Faculty of Business at AUT University, Auckland, New
Zealand. He obtained his PhD in marketing from the
University of Auckland and was the winner of the 2006
Emerald/EFMD Outstanding Doctoral Research Award in
the category of Marketing Strategy. His research experience is
in the areas of branding, business to business marketing and
retail channels. His research has been published in journals
including the Journal of Product and Brand Management and
Marketing Theory. He is on the editorial board of Industrial
Marketing Management. Mark S. Glynn is the corresponding
author and can be contacted at: mark.glynn@aut.ac.nz
Judy Motion is Professor of Communication at the
University of Waikato Management School, New Zealand.
She researches marketing, management and public policy
issues drawing upon qualitative approaches to theorize
discourse practices. Judy leads a government-funded
research programme investigating sustainable biotechnology.
She is the Australasian Associate Editor of the Journal of
Communication Management and Corporate Communications,
and a member of the editorial boards of the Journal of Public
Affairs, the Australian Journal of Communication, and PRism.
Her research is published in numerous journals including
Public Relations Review, Media Culture & Society, Journal of
Communication Management, Politic al Communication,
European Journal of Marketing, Australian Journal of
Communication, and Journal of Public Relations Research.
Roderick J. Brodie is Associate Dean (Academic) and
Professor in the Department of Marketing at the University of
Auckland of Business School, New Zealand. His research
experience is in the areas of marketing strategy, branding,
marketing research, services, marketing science, and
forecasting. His publications have appeared in international
journals including Journal of Marketing, Journal of Marketing
Research, International Journal of Research in Marketing,
Management Science, and Journal of Services Research. He is
an area editor of Marketing Theory and on the editorial boards
of Journal of Marketing, International Journal of Research in
Marketing, Journal of Service Research, and Australasian
Journal of Marketing.
Multiple roles of brands in business-to-business
services
Jane Roberts and Bill Merrilees
Department of Marketing, Griffith University, Gold Coast, Australia

Abstract
Purpose – The paper seeks to investigate the role of branding in a B2B service context.
Design/methodology/approach – This paper focuses on a particular B2B service industry, namely leasing mall space to retail tenants. A quantitative
study is undertaken of 201 mall tenants using SEM analysis.
Findings – The main finding was that brand attitudes were the most important influence on the contract renewal. Another major finding was that
brand attitudes were mainly explained by service quality. Branding also played another, albeit minor role, in building trust between the supplier and the
customers.
Practical implications – The results can be used by industrial firms to build stronger brands and, in turn, to use these brands to maximize customer
retention.
Originality/value – This is one of the first studies to examine service B2B brands. It is also one of the first studies to examine the multiple roles that
brand can play in B2B marketing.

Keywords Business-to-business marketing, Services, Brands, Trust, Customer retention

Paper type Research paper

An executive summary for managers and executive
readers can be found at the end of this issue.
Introduction
Extant research on branding, in the context of business-to-
business (B2B) marketing, remains scarce. This applies
equally to products and services. Historically, branding has
been almost synonymous with consumer products,
particularly the type of products that appear in
supermarkets, such as toothpaste or coffee. The last decade
has seen an extension of branding principles to a wide number
of areas that hitherto had not seemed pertinent, including
companies as brands (De Chernatony, 2002), retailers as
brands (Burt and Sparkes, 2002), cyber-firms (Merrilees and
Fry, 2002) and many others.
A small number of dedicated recent articles have examined
business-to-business (B2B) brands. However the literature is
embryonic, so much remains to be done. The current paper is
conventional to a certain extent in that it seeks to explain
alternative brand building possibilities (antecedents of brand
attitudes) and consequences of brand attitudes to the B2B
brand, both in the context of B2B services. Although the
paper makes a contribution to understanding both brand
building (antecedents) and consequences of B2B branding, it
is in terms of the latter that a new conceptual contribution is
made. Multiple roles are purported for B2B service brands.
It will be argued that for developing B2B service brands,
service quality competence and harmonious relationships with
customers are important. This is a contribution not clearly
articulated previously. However, a more novel contribution is
to open up the role of brands in B2B marketing. A traditional
role is to see branding as adding a point of difference
(competitive advantage) in the purchasing decision of
potential customers. A customer choosing between two
options, that otherwise seem about equal in terms of
product and servicing specifications, might prefer the
stronger brand. More generally, brand reputation has always
been a factor in B2B purchasing decisions. Yet B2B services
might be more complex, with more emphasis on the ongoing
relationship. A challenge is to better understand such
complexity. We propose in this paper that B2B brands help
build trust with the customer that in turn enhances a greater
chance to purchase. As such, this view provides a potentially
new conceptual understanding of the role of branding in B2B
service markets. Empirical tests were undertaken in the
context of a mall tenancy service – that is, the provision of
mall space to retail business tenants. A study of 201 shopping
mall tenants in Australia was included in the sample and was
tested empirically.
The primary research objectives, then, are:
.
to identify the determinants of brand attitudes in B2B
services;
.
to ascertain whether branding mediates the service quality
to trust relationship; and
. to determine whether branding influences the contract
renewal decision.

The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0885-8624.htm
Journal of Business & Industrial Marketing
22/6 (2007) 410– 417
q Emerald Group Publishing Limited [ISSN 0885-8624]
[DOI 10.1108/08858620710780172]
Literature review
Business-to-business branding research is relatively scarce
compared to consumer markets. This is somewhat surprising,
because one would expect the brand to be one of selection
criteria for most B2B decisions. Some of the uncertainty about
branding is that there are two inter-related processes, namely
purchasing products and selecting suppliers. The latter decision

410
 Multiple roles of brands in business-to-business services
Jane Roberts and Bill Merrilees
has always included the reputation of the supplier as a selection
criterion. In nearly all studies of industrial buying, reputation
usually appears as a top-four selection criterion. Corporate
reputation is part of the branding process, albeit corporate
branding (see van Riel et al., 2005). In other words, although
much of the original B2B literature makes little explicit reference
to branding, it has always played a prominent implicit role via the
reputation variable.
In the 1990s there were few articles on B2B branding.
Gordon et al. (1993) outline how brand equity for business
products can be developed over time, starting with brand
awareness. Mudambi et al. (1997) case researched two
precision bearings firms in an attempt to understand the
relevant segments better. They emphasized that the brand is
more than a name. However, their results seem to emphasize
price, product quality, and distribution and support services
ahead of the company reputation. This may be an industry in
which buyers at least contemplated switching and even
breaking contracts if necessary, so it may not be typical. Kim
et al. (1998) provide a useful conceptual base for the role of
brand equity in business markets, without progressing to
empirical testing.
Credit is due to these authors for these pioneering articles
that provide a framework for examining the nature of brands
and their relative role in particular products and segments.
Much of the early B2B branding research has emphasized the
role of branding as a product differentiator (Hutton, 1997;
Saunders and Watt, 1979; Shipley and Howard, 1993;
Sinclair and Steward, 1988).
Subsequent research continues to highlight the relevance of
branding to business markets. Mitchell et al. (2001) asked
operating managers to comment on whether branding was
relevant to them. Although the results seemed encouraging,
there was an emphasis on tangible features such as brand
name, quality, reliability, performance, service and value for
money. Low and Blois (2002) mainly focused on a single case
of an optic sorting machinery supplier to discuss basic
branding concepts and how to deal with the threat of generic
brands. Webster and Keller (2004) applied some consumer-
based branding tools to business markets, but also highlighted
some distinguishing features. The role of industrial buyers
and buying centers suggests an important role for relationship
management, and that is used to develop ten guidelines for
successful industrial branding.
The three most recent articles on business branding at the
time of writing the current paper were more sophisticated in
their use of quantitative analyses (Bendixen et al., 2004;
McQuiston, 2004; van Riel et al., 2005). Bendixen et al. (2004)
used conjoint analysis to assess the relative importance of
branding as a selection criterion. Price, delivery and quality
were found to be the most critical attributes. However, branding
did make a significant contribution to adding value. The article
concludes with support for communication programs that help
build the corporate brand. McQuiston (2004) provides an in-
depth analysis of a particular (steel) brand, with an emphasis of
the brand promises (in terms of technical, logistical and support
services) to particular segments. van Riel et al. (2005) use a
chemical company to apply a structural model of the
determinants of brand loyalty. They show that both product
branding and company branding contribute to loyalty. Product
quality and support services in particular contributed to the
branding success. This is one of the more explicit modeling
studies of industrial branding.
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Volume 22 · Number 6 · 2007 · 410 –417
Webster (2000) provides a different perspective on B2B
brands. Usually, manufacturers’ brands are discussed in a
B2C context; for example Coca Cola or Nike. One issue that
Webster (2000) notes is the declining power of manufacturers
relative to retailers and therefore the declining significance of
manufacturers’ brands in the total schema. Such brands
would seem to be out of the scope of B2B marketing.
However Webster (2000) calls for a reconceptualization of
manufacturers’ brands by taking into account the broader
business network. Webster introduces a B2B context by
focusing on the role of manufacturers’ brands in dealing with
other channel members such as wholesalers and retailers.
Attributes like pre-established demand, quality levels,
credibility and trust are likely to be greater when resellers
deal with strong manufacturer brands. Thus strong brands
have value in penetrating the distribution channels. One way
that manufacturers’ brands are conceptualized (Webster,
2000, p. 21) are as “a pledge of support to retailers”.
Building on Webster (2000), Brodie (2005) argues that
brands are important as facilitators of relationships. In the
B2C context, brands facilitate the relationship between the
firm and the final consumer. In the B2B context, brands
potentially moderate the relationship between firms. This is a
powerful perspective provided by Brodie (2005). However,
although a number of student theses have been conducted
using this perspective, the published material has not yet
eventuated.
The above literature does show a growing research interest
in business-to-business branding, especially in the last five
years. It is too early yet to have a consensus because we do not
yet have a critical mass of studies in the field.
Gap in the literature
The main gap in the literature is firstly that products (including
components, chemicals, steel and machinery) dominate the
conventional B2B branding approach, with little attention to
B2B services. Referring to the B2C literature, it was not until
the early 2000s that the branding literature was seriously
adapted from products to services. (Berry, 2000; De
Chernatony and Segal-Horn, 2003; Grace and O’Cass,
2005). The B2B branding literature is following a similar
evolution with a late examination of B2B service branding
relative to product branding. The recent B2C branding
literature does suggest some idiosyncrasies that especially
apply to services compared to products. The B2C services
branding literature has highlighted the greater number of
points of contact and communication, the greater role of
relationships, the role of internal branding (with employees)
and a greater experiential component. Performance
variability, complexity and inconsistency suggest that it
might be more difficult to generate brand equity in services
compared to products (Berry, 2000; De Chernatony and
Segal-Horn, 2003; Grace and O’Cass, 2005). Further, until
we do the research then we have no way of knowing whether
the product branding B2B studies carry over to service firms.
Moreover, service B2B markets have been growing very
rapidly in recent decades, due to the outsourcing of IT, HRM
and even management consulting components of
manufacturers. Thus we have a growing component of B2B
markets for which we have little or no academic branding
studies.
We will address this gap by studying mall property services
to retail tenants, that is, the leasing of mall space to retail
 Multiple roles of brands in business-to-business services
Jane Roberts and Bill Merrilees
tenants. A second gap in the literature is that branding is
mainly studied at the final stage of decision-making, namely
as an extra influence on the final product or supplier selection.
Emerging research (Berry, 2000; Webster, 2000; Brodie,
2005) suggests a potential role for brands further up the value
chain. The suggestion is that brands may facilitate
relationships between channel members. However, there is
limited empirical investigation of this possibility. Such a
research gap is addressed in the current paper by explicitly
modeling and testing the proposition that brands facilitate
relationships between business firms.
Theoretical framework
The theoretical framework for this study can be formulated in
terms of a path analysis, shown graphically in Figure 1. The
model represents a hierarchy of effects leading to the final
contract renewal decision by the tenants. This model can be
split into three main parts, moving backwards through the
hierarchy of effects. Each path can be specified in terms of a
specific hypothesis. For example, as shown below, H1 refers to
the path from brand attitude to renewal of the contract.
The end stage of the model is the contract renewal decision.
It is hypothesized that brand will be a major influence here
(H1), consistent with the B2B product literature synthesized
above. An additional influence could derive from trust (H2).
The link between trust and behavioral intention has been
studied in the B2C context (Chaudhuri and Holbrook, 2001;
Delgado-Ballester et al., 2003; Singh and Sirdeshmukh,
2000), but not the service B2B brand context.
The middle part of the model is the explanation of trust
between the (mall) supplier and their customers (tenants).
The traditional determinants of trust include empowerment
(H3) and interaction that we term responsiveness (H4)
(Morgan and Hunt, 1994; Mohr and Spekman, 1994).
Responsiveness can also be considered in terms of one of the
Figure 1 Structural equation model of B2B service branding
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Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 410 –417
two key components of the initial way that Grönroos (1982)
divided service quality. Grönroos (1982) divided service
quality into technical aspects, such as what type of services
was provided and functional aspects, referring to the way or
how (such as responsiveness) services were delivered to the
customer. Later, Grönroos (1987) added a third type of
service quality, namely the support provided by the firm; this
is similar to our empowerment variable. The role of different
types of relationship antecedents to trust is discussed in
Merrilees and Fry (2003), Mohr and Spekman (1994), and
Morgan and Hunt (1994). Finally, unlike most traditional
approaches to explaining trust, we introduce a relatively new
potential influence, namely brand (H5) (Brodie, 2005;
Webster, 2000). This additional component adds to the
richness of how brand might influence the overall
performance of a supplier.
The front end of the model seeks to (partially) explain the
development of brand attitudes. Service quality is one of the
potential influences on brand attitudes (H6) (Berry, 2000;
Selnes, 1993). We define service quality as similar to the
technical aspect defined by Grönroos (1982). A process
variable, empowerment, is also included as a potential
influence that might gain acceptability by the tenant (H7).
No previous study has included such a potential influence,
but we can hypothesize that the empowerment support given
by the mall management to the tenant could positively
influence the perceptions of the brand held by the tenants.
Seven hypotheses (H1-H7) have been devised for testing.
The brand has three entries in the model. First, the model
explains the factors leading to stronger brand attitudes.
Second, industrial brands help build the relationship between
the parties. Third, brands contribute to the contract renewal
decision.
The key constructs are explained as follows.
Brand relates to the overall performance and image of the
center. It considers the consumer perspective in relation to
the center brand. Particularly, in the way consumers identify
the special or unique characteristics of the center brand itself
and the strength in which they then feel the brand performs.
The literature refers to not just the role of branding as a
means of differentiation but also the important role of
establishing business or corporate reputation (Hutton, 1997;
Saunders and Watt, 1979; Shipley and Howard, 1993;
Sinclair and Steward, 1988).
Empowerment relates to the way in which one party feels
able to direct their own actions towards a desirable outcome.
This construct considers whether tenants feel that they have
some power in their dealings with centre management and
have a chance to have their concerns heard. It further
considers whether they feel that centre management treats
them as an equal (Shaw and Dawson, 1996; Davies, 1996;
Daprain and Hogarth-Scott, 2003).
Trust is generated when both parties can anticipate a
consistent level of performance and behavior from each other.
It would mean that both parties would be satisfied that the
behavior of the other party’s service quality dimensions are
met, that communication is open, relevant and timely, that
any disputes are dealt with appropriately and that any power
potential is used without any undue coercion (Morgan and
Hunt, 1994; Mohr and Spekman, 1994; Ruppel and
Harrington, 2000).
Service quality relates to how well the core services
undertaken by one partner in the relationship are actually
 Multiple roles of brands in business-to-business services
Jane Roberts and Bill Merrilees
performed compared to the expectation of how well the
service should be performed. The core services in the
shopping center context relate to the performance of tangible
measures such as the landlord’s responsibility to maintain the
center, promote the center and provide an attractive retail mix
(Bitner, 1995; Sit and Birch, 2001).
Responsive behavior reflects the way the landlord responds to
issues, provides information, consults and seeks feedback on
issues, and the timeliness and relevancy of the information
provided. A large component of responsiveness is the way
both parties are able to communicate their needs. However,
communicating is one step. Being available for meaningful
communication to take place, responding to the issues raised
and following through with any commitments made, is as
essential as the communication itself. Responsiveness also
relates to the way in which center management actively
promotes the relationship between itself and the tenants. It
considers whether center management encourages positive
suggestions from tenants, nurtures and develops the
relationship and provides ongoing assistance to tenants
(Mohr and Spekman, 1994; Howard, 1997; Baker, 2002;
Morgan and Hunt, 1994).
Lease contract renewal relates to the strength of positive
feeling towards the center, which is demonstrated through a
willingness to continue the relationship into the future. This
has most often been measured in terms of intention for a
consumer to purchase a product from the same retailer/
supplier again. Hennig-Thurau (2000) sees customer
retention as the central objective to relationship marketing
and has examined the correlation between customer retention
and relationship quality. This study looked at the
enhancement of customer product knowledge and skills as a
means to promote better relationships and therefore customer
retention.
Methodology
Data collection
A stratified collection approach was used to collect the data.
In the first stage, centers were conveniently chosen on the
basis of covering a range of mall types, namely both large and
small and both metropolitan and regional, across three states
of Australia (NSW, Queensland and Victoria). Twenty malls
volunteered to participate in the study. The second stage was
to get the mall management to distribute the survey to all of
the tenants within that mall.
Data was collected using the self-administered
questionnaire that was distributed by the center managers
through their network. The total sample size was 201 tenants.
The response rate for the tenants was 20 percent. The tenant
sample was made up of 44 percent regional centers and 56
percent small community to neighborhood centers.
Measures
The items for the brand scale (see Table I) were adapted from
the performance satisfaction literature to relate to the
shopping center environment. All scales tested as reliable,
with the Cronbach’s a ranging from 0.78 to 0.93, comfortably
above the 0.70 threshold required. The average variance
extracted was also satisfactory, ranging from 0.58 to 0.87, all
above the desired threshold of 0.50.
Particular attention was given to discriminant validity,
across all pairs of constructs. Similar tests apply for testing for
413
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 410 –417
Table I Scale Items
Scale Scale items
Trust (1) You trust centre management without hesitation
(2) You believe that centre management will continue to
provide high levels of service quality in the future
(3) We are able to exchange confidences with centre
management
(4) I trust that centre management will do their best to
support my business
(5) I believe that centre management will live up to its
promises
(6) I can depend on centre management to always
operate with integrity
(7) I personally trust centre management
Brand (1) The centre has generated a lot of customer visits
(2) The centre has a good reputation among consumers
(3) This centre is a great brand from the consumer
perspective
(4) This is an excellent shopping centre for consumers
(5) There is something special about this centre for
consumers
(6) Customers greatly admire this centre
Empowerment (1) Center management treats me as an equal
(2) I have some power in my dealings with center
management
(3) Even if I do not have too much power I get a chance
to have my concerns heard
(4) Both the landlord and tenants invest a lot of time and
effort in developing the relationship between them
Service quality (1) The central areas are kept clean and tidy
(2) There is a pleasant ambience that makes it an
attractive place to shop
(3) The centre is marketed well throughout the year
(4) There are effective centre wide promotions
(5) There are effective periodic special events
(6) Overall the quality of service that centre management
provides is excellent
(7) Everyday maintenance of centre, such as lighting,
plumbing and rubbish collection are well manageda
Responsiveness (1) Centre management are always friendly and
approachable to deal with
(2) Centre management is responsive to emerging
problems
(3) Centre management is readily accessible when you
need them
(4) I am kept informed with timely and appropriate
information
(5) Information about forthcoming changes of the centre
is shared with tenants
(6) Centre management is skilled at working with us to
solve problems
(7) Centre management prevents emerging problems
getting out of hand
(8) Direct and open communication with tenants is
important to centre managementb
Lease renewal (1) I am keen to renew my lease
(2) It is likely that I will renew my lease
(3) I wish to stay as long as possible in this centre
(4) I have no doubts whatsoever about renewing my
lease
Notes: aDeleted due to cross loading; bdeleted due to low loadings
 Multiple roles of brands in business-to-business services
Jane Roberts and Bill Merrilees
unidimensionality (Anderson and Gerbing, 1988).
Discriminant validity occurs when the average variance
extracted for a pair of constructs is greater than the squared
correlation coefficient between the same pair of constructs
(Fornell and Larcker, 1981). The results (not shown here)
revealed that all pairs of constructs met this condition.
Confirmatory analysis, using AMOS, was used to test the
validity of the constructs. The two-stage Gerbing and
Anderson (1988) method was used, with the first stage
focusing on measurement. The model was assessed using a
partially disaggregated approach. Partial disaggregation
involves the creation of two or more composite variables for
each construct (Bentler and Wu, 1995; Dabholkar et al.,
1996). The composites may be created from identified sub-
dimensions of an indicator construct of the overall latent
construct (Bagozzi and Heatherton, 1994) or items may be
allocated and aggregated randomly as “it is expected that any
combination of a construct’s variable indicators should yield
the same model fit” (Dabholkar et al., 1996). The latter
approach was taken for this research. Partial disaggregation
provides particular benefits of being able to assess a complex
higher-order model, while reducing the level of random error,
and give more stable estimates from reducing the number of
parameters to be estimated and improving approximation of
normality distributions (Bagozzi and Heatherton, 1994;
Dabholkar et al., 1996).
The measurement tests relating to the first stage
(measurement) of the two-stage Gerbing and Anderson
(1988) test are shown in Table II. The relevant goodness of fit
indices is greater than the 0.90 threshold needed for an
indication of a good fit between the model and the data. The
standardized root mean residual (SRMR) is also appropriately
less than the threshold of 0.05, indicating good overall fit,
while the CMIN/df ratio (x2 divided by degrees of freedom) is
appropriately less than 3. Table II shows that this set of
measures is valid.
Results
First, we note that there were two determinants of brand
attitudes. Service quality was the main influence on brand, with
a standardized beta coefficient of 0.47 (t-value ¼ 5:68), with
further support from empowerment, with a beta coefficient of
0.19 (t-value ¼ 2:31). These coefficients were statistically
significant at the 0.01 and 0.05 levels, respectively. H6 and H7
are supported by the results because each beta coefficient is
statistically significant.
Second, three determinants of trust were identified by the
SEM analysis. Responsiveness was the most important
(b ¼ 0.57; t-value ¼ 6.20), followed by empowerment (b ¼ 0.36;
t-value ¼ 3.99) and brand (b ¼ 0.12; t-value ¼ 2.31). The
first two coefficients were significant at the 0.01 level and the
last at the 0.05 level. H3, H4 and H5 are supported.
Third, two determinants of contract renewal were
indicated. Brand attitude was the most important influence
on contract renewal (b ¼ 0:39; t-value ¼ 4:65), with trust
Table II Model fit statistics
x2 df GFI TLI CFI SRMR CMIN/df
CFA measurement 103.2 39 0.92 0.94 0.96 0.035
SEM estimation 111.3 44 0.91 0.94 0.96 0.036
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 410 –417
(b ¼ 0:26; t-value ¼ 3:13) next in importance. Each beta
coefficient was statistically significant at the 0.01 level. H1
and H2 are supported.
The fact that all the SEM paths were statistically significant
suggests convergent validity. It also indicates that all
hypotheses were supported. The overall SEM estimating
model fit statistics are given in Table II and indicates a
broadly satisfactory fit of the model with the data. All of the fit
indices are greater than 0.90; SRMR is less than 0.05; and
CMIN/df is less than three.
Discussion
The previous literature on B2B branding has focused on
products rather than services and has yet to reach a consensus
on how important branding is in terms of purchase selection,
supplier selection or repurchasing. The current study has
evolved B2B branding research by studying B2B services.
Importantly, the branding and other measures in this services
context were found to be valid and the overall model
acceptable. Therefore the results can be considered with
confidence, though additional B2B service brands will need to
be conducted before we can rigorously compare product
brands with service brands.
With this limitation in mind, the results are clear in terms of
identifying brand attitudes as the most important determinant
of contract renewal among the sample of 201 tenants. That is,
for B2B service brands, brands do matter for major repurchase/
renewal decisions. This is one of the first studies to establish
this proposal. In at least some of the B2B product brand
studies, branding was not always the main determinant, so the
research raises the possibility that branding may be more
important in B2B services than B2B products, but this is put
up as a proposition at this stage, pending more studies into
B2B service branding.
Apart from extending the application of B2B branding from
products to services, the study also explores more complex
mechanisms associated with B2B branding, within an
integrated SEM model. Two mechanisms have been
investigated, namely the determinants of brand attitudes
towards B2B services and the role of branding as a trust builder.
The determinants of brand attitudes towards B2B services
have been studied by incorporating brand attitudes as a
dependent variable. Likely possible antecedents were then
specified in the model. Two antecedents of brand attitudes
were identified. Service quality in terms of promotion and
management aspects had the greatest influence, followed by
empowerment. Other influences on brand attitudes would be
exogenous to the model used and would need to be studied
separately.
The final role of brand in the model is as a trust builder.
The work of Brodie (2005) and Webster (2000) had flagged
the possibility that brands have a potential role in building
trust in the relationship between the supplier (the mall in the
case of the current paper) and the customer (the retail tenant
in the case at hand). The current study provides empirical
support for this trust building role of brands.
Notwithstanding, other variables dominate the trust
equation. In the SEM modeling, brand comes third out of
three. But it is statistically significant (at the 0.02 level). Thus
2.65 we have established a role for branding as a trust builder, with
2.53 the qualification that it is a minor and not the dominant
influence on trust.
414
 Multiple roles of brands in business-to-business services
Jane Roberts and Bill Merrilees
In sum, the model we have conceptualized and tested
includes three pivotal roles for branding, which is more than
any other B2B quantitative study. The additional roles of
branding provide insight into the mechanisms that lead up to
major B2B repurchase decisions.
Managerial implications
The results are very clear in terms of how to build a B2B
service brand. In particular, continuous B2B service
relationships are likely to depend on the service quality
provided by the supplier. Service quality was the main
determinant of retail business tenants having a positive brand
attitude of the mall. Mall services generally are provided on
the basis of a long-term relationship, embedded in a contract
that is renegotiated every 3-5 years. The contract provides a
stable base to form such a long-term relationship. Service
quality reflects what can be considered to be a competency-
capability on the part of the mall manager. It is a core
production skill that is essential for any service provider. In
this particular case it is the quality of services, such as
maintenance and promotion, which drive the favorable
(brand) attitudes that the tenants have of the mall. We
would expect this factor to be important for most B2B
services, though future research is needed to test this.
If we switch the attention of managers away from building
strong brands to maximizing customer retention, the paper
provides clear guidance: brand attitudes are the most important
determinant of contract renewal. Customer retention is regarded
as the most profitable way of growing a business, so the results
of this study put the spotlight on building strong brands as the
best strategy for achieving this. Companies need to have
suitable metrics for understanding their brand strength and to
continuously monitor this over time. Strong brands appear to
be the most powerful way of maximizing customer retention.
However, trust also contributes to B2B service contract
renewals. B2B service firms can therefore supplement brand
building with trust building in a combined way to retain
customers.
Finally, the paper provides guidance to B2B service firms
on how they can build trust with their customers.
Responsiveness and empowerment were seen as critical
factors in this respect. However, a somewhat novel
(supplemental) way to build trust is through strong brands.
This reinforces the need by B2B service firms to develop and
build strong brands, not just for customer retention but also
trust building.
In summary, if we focus on the two key components of
brand loyalty advocated by Day (1969), namely brand
attitudes and high repeat patronage, it can be seen that the
model integrates the two components. Brand attitudes have
been estimated to be the main determinant of repeat
patronage. The model thus potentially assists service B2B
firms build genuine brand loyalty, namely by building strong
brand attitudes and understanding their role in driving repeat
patronage.
Conclusions
This study moves B2B branding research from products to
services. The results show that service quality is the most
important determinant of brand attitudes in the sample
examined. Companies wishing to build strong B2B service
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Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 410 –417
brands should focus on delivering high levels of (appropriate)
service quality.
In keeping with past studies, branding has a major
contribution to the renewal of contract decision. In fact,
strong brands were the most important factor in the intended
contract renewal decision. Perhaps the most critical practical
implication of the study is the advocating of brand as the
centerpiece of any major customer retention program.
A novel finding was that brands also enhance the quality of
the relationship between a B2B service provider and their
clients.
Our study thus provides evidence that supports the multiple
roles that brands might play in B2B marketing.
Limitations and future research
The main limitation is that a single service industry has been
used. At face value, the results seem generalizable, but
additional research is needed to verify this point. The sample
size (201) was reasonable, but a larger sample would have
been preferred. The particular service was continuous, so we
still do not have studies on discrete B2B services, such as
management consulting projects. Another limitation is the
application to a single country. Finally, the lack of consensus
of the B2B product branding studies makes it difficult to
compare services and products.
Future research is needed on other B2B service industries
(both continuous and discrete) and countries to see whether
the pattern of results hold more generally. Researchers are
encouraged to get samples of 300 or more, though this is not
always possible. It would also be interesting to apply the same
model to B2B product firms, so that a clearer difference could
be made between B2B services and products.
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paper presented at the 2001 ANZMAC Conference,
Auckland, New Zealand.
van Riel, A., de Mortanges, C. and Streukens, S. (2005),
“Marketing antecedents of industrial brand equity: an
 Multiple roles of brands in business-to-business services Journal of Business & Industrial Marketing
Jane Roberts and Bill Merrilees Volume 22 · Number 6 · 2007 · 410 –417

empirical investigation in specialty chemicals”, Industrial
Marketing Management, Vol. 34, pp. 841-7.
Webster, F. (2000), “Understanding the relationships among
brands, consumers and resellers”, Journal of the Academy of
Marketing Science, Vol. 28 No. 1, pp. 17-23.
Webster, F. and Keller, K. (2004), “A roadmap for branding
in industrial markets”, Journal of Brand Management,
Vol. 11, May, pp. 388-402.
About the authors
Jane Roberts is associated with the Department of Marketing,
Griffith Business School, Griffith University, Australia. Her
main research interests are business-to-business branding and
business-to-business relationship building. She is particularly
interested in the marketing and management of shopping
malls.
Bill Merrilees is Professor of Marketing at the Griffith
Business School, Griffith University, Australia. His research
interests include branding, B2B, strategy, services
innovations, and e-retailing. He has published over 80
journal articles, in publications including Journal of
Advertising Research, Journal of Business Research, Industrial
Marketing Management, Journal of Business and Industrial
Marketing, International Marketing Review, and Journal of
Strategic Marketing. Bill Merrilees is the corresponding author
and can be contacted at: bill.merrilees@griffith.edu.au

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417
 The role of corporate brand image in the
selection of new subcontractors
Anna Blombäck
Jönköping International Business School, Jönköping, Sweden, and
Björn Axelsson
Stockholm School of Economics, Stockholm, Sweden

Abstract
Purpose – Despite the increased focus on brands in B2B markets, little research to date has focused on understanding the role brands play in different
B2B contexts. To make a contribution in this area, the article aims to investigate whether, why and how corporate brand image plays a role in the
selection of new subcontractors. This category of firms is particularly challenging to explore from a branding perspective, as their market offering is
defined and designed by their customer and, further, not recognized by the customer’s customer.
Design/methodology/approach – A qualitative interview study with respondents from nine companies (three subcontractors and six of their
customers) was conducted. The interviews were semi-structured and focused on considerations made by both buyers and sellers in sales and
purchasing processes.
Findings – The study reveals that corporate brand image can be especially important when buyers need to identify new subcontractors. This process is
only partly formalized, and due to limited resources and perceived risk, buyers need to rationalize the selection process. The brand’s primary role is to
attract interest and provide trust with regard to capacity, on-time delivery and competence. Explicit communications, utilizing various elements such as
plant orderliness, previous clients, the firm’s website, etc., help build up the brand.
Originality/value – The paper illustrates that a corporate brand and branding perspective can be fruitfully applied in a subcontractor context. It
promotes a deeper understanding of the complexity of decision making in B2B markets. The findings suggest that more conscious and proactive
branding efforts could improve a subcontractor’s business.

Keywords Brands, Buying behaviour, Corporate image, Subcontracting

Paper type Research paper

An executive summary for managers and executive
readers can be found at the end of this issue.
Introduction
Although brands have often been defined as synonymous with
a name, term, sign, symbol or design (e.g. Kotler, 2000), the
scope of the brand concept may be much broader. Kapferer
(1992, p. 12), for example, describes the brand as “a living
memory”, thereby connecting psychological dimensions to
the concept. From this perspective, brands are built up by a
person’s interaction with tangible and intangible features of
the entity that the brand represents (e.g. a good, a service, an
individual or an organization). Together, these interactions
create associations to that entity, giving it meaning and
explaining its origin and direction (Kapferer, 1992). Thus,
brands can be explained as intangible assets based on
audience perception (e.g. Aaker and Joachimsthaler, 2000;
De Chernatony and Mc Donald, 1998; Garrity, 2001; Grace
and O’Cass, 2002; Nilsson, 1998; Riezebos, 2003). The
brand represents ideas, associations and images related to an
entity recognized, for example, by its name, logotype, slogan,
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0885-8624.htm
Journal of Business & Industrial Marketing
22/6 (2007) 418– 430
q Emerald Group Publishing Limited [ISSN 0885-8624]
[DOI 10.1108/08858620710780181]
color or design. It is defined by an audience’s perceptions, and
created and maintained through the communication
surrounding the entity. Brand communications can
represent a wide variety of things, including people. As
Olins (1989, p. 210) writes: “everything that the corporation
is, everything that it does, communicates – to everybody with
whom it deals”. Thus, brands are, by definition, not limited to
a certain market or type of products.
Owing to global market changes, the subcontractor markets
in Western Europe have experienced increased competition.
This has resulted in increased pressure for price cuts and
global reach. Furthermore, demands on suppliers of
components and parts to provide a broader range of
functions (systems solutions) have also increased. The
current tendency is for large companies to reduce the
number of suppliers used. Subcontractors, therefore, are
experiencing a situation of increased requirements and
competition. An important question for such firms is how
they can set themselves apart, influence audience perception,
and thereby succeed in becoming one of the selected suppliers
or in retaining their position as suppliers. Increased efforts to
develop firm capabilities combined with a stronger focus on
branding efforts could be part of the answer.
Subcontractor markets and brands
In B2B contexts, the notion “Intel Inside” constitutes a
current and well-known effort to make a components
producer visible in the final product (e.g. Norris, 1993).
B2B markets, however, embrace a range of different suppliers,
some of which have no direct contact with the end user or

418
 Corporate brand image in the selection of new subcontractors
Anna Blombäck and Björn Axelsson
consumer markets. Subcontractors are such firms. In essence
they have no products of their own, but manufacture goods
according to buyers’ specifications. Hence, subcontractors do
not have a well-defined product to market. In business
markets, however, a common feature is that the “product”
concept needs to be widened to include complementary
issues, such as adaptations of processes and routines in order
to better solve (common) problems (Håkansson and
Waluszewski, 2005). What the subcontractors offer is their
ability to manufacture things on behalf of someone else. They
might be seen as firms that offer a bundle of services, but in
the end deliver pieces of goods. There are many such firms in
various industries.
In terms of branding, subcontractors can be seen as having
a special position. First, they do not know exactly what they
are selling until the buyer has requested it. Second, as the
products they manufacture are actually the property of the
buyer, like service providers they have no tangible product on
which to display their identification mark (e.g. logotype).
Third, the products they deliver are not unique, as other firms
normally have the capacity to manufacture identical parts.
This could be considered a very odd situation, or perhaps
even a “worst case scenario”, for proponents of branding in
general. Still, we think that branding efforts could be highly
relevant for today’s stakeholders in subcontractor firms.
The body of research and literature on industrial brands
and branding has increased since the 1990s. Still, Lynch and
de Chernatony (2004) argue that the interest shown in brands
in business practice has not yet been met by an equally strong
research interest, indicating that there are still gaps in the
field. Research has reported that brands and brand equity are
vital issues in industrial markets as well (e.g. Bendixen et al.,
2004; Egan et al., 1992; Firth, 1993; Gordon et al., 1993;
Hutton, 1997; Michell et al., 2001; van Riel et al., 2005).
Nevertheless, little empirical investigation to date has focused
on trying to understand the functions of brands in such
contexts. Further, few studies so far have highlighted the
brand phenomenon in particular B2B situations, industries
and firm categories. Two key questions worth exploring are
why and how brands have an impact on the success of
suppliers in B2B markets and, thus, whether branding is
indeed important to them. This article aims to address aspects
of these questions. The focus will be on subcontractor
markets.
Buyers in B2B markets normally search among current
suppliers when they require a new or modified product or
contract (cf., for example, Baraldi, 2003; Håkansson, 1989;
Håkansson and Waluszewski, 2002). Previous experience and
knowledge of a supplier can help the buyer decide which
suppliers should be approached or asked to leave an estimate
on the planned contract. As this choice is based on
experience, one might assume that buyers only approach
suppliers they trust and do not mind doing business with. On
the other hand, one might also assume that the estimated
price and ability to fulfill the terms of the contract are most
important. Development processes in business markets,
however, are often complex. A seemingly minor change
tends – gradually – to involve a larger number of actors to
help solve the problems at hand (Skarp, 2006; Von
Corswandt, 2003). Some suppliers are already known to the
buying firm, others are unknown. The buyer must decide
which firms to approach for estimates. In this process, the
buyer’s image of currently utilized subcontractors might affect
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Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 418 –430
which are considered as qualified and suitable for certain
products. If there are many similar suppliers, their corporate
image may affect their chances of being asked to leave an
estimate. An even more problematic and complex situation
arises when current subcontractors do not suffice. A new
subcontractor, of which the buyer has no practical experience,
needs to be located, investigated and – potentially – added to
the portfolio. This article explores the role of corporate
brands in this situation. One way to improve our
understanding of brand influence is to investigate buyers’
purchasing behavior (cf. Mudambi, 2002). This article builds
on an empirical study investigating buyers’ behavior during
the processes of searching for, evaluating and selecting new
subcontractors.
The article continues as follows. We first provide an outline
of the brand concept, followed by theories of industrial buying
behavior, B2B brand research and corporate branding. This
will provide the platform for the empirical study. The
subsequent sections present the research method, the study’s
results and analyses. The analysis is structured according to a
set of themes that help portray the diversity of factors
influencing the process of selecting new subcontractors.
These factors demonstrate in what ways corporate brands can
constitute an important issue for subcontractors. In the final
section, the results are summarized and implications for both
research and business practice are discussed.
Theoretical framework
When discussing the brand, current literature generally does
not refer solely to apparent “elements” such as the name,
logotype or symbol. The focus instead is on the sum of ideas
and associations these elements evoke among audiences, i.e.
the brand’s image (e.g. De Chernatony and Mc Donald, 1998;
Duncan, 2002; Garrity, 2001; Grace and O’Cass, 2002;
Nilson, 1998; Riezebos, 2003; Simões and Dibb, 2001). For
customers, a brand can have functional (identifying a quality
product), practical (aids in structuring search and selection
phases), positioning (helps the buyer create a certain identity)
and emotional values (provides use satisfaction) (e.g. De
Chernatony and Mc Donald, 1998; Riezebos, 2003).
During the greater part of the twentieth century, brands
were regarded as something mainly applicable to and useful
for companies selling consumer goods. In contrast, the focus
on industrial branding has been minor (Low and Blois, 2002;
Melin, 1999; Nilson, 1998). This is not surprising
considering that the exchange in B2B markets has often
been described as driven by precise and technical
specifications (e.g. Malaval, 2001; Solomon, 2002; Wind
and Thomas, 1980) and by business buyers who are
professional, active customers that carefully evaluate
alternatives accordingly, indicating that emotional impact
and impulse purchases are rare in the industrial market (De
Chernatony and Mc Donald, 1998; Malaval, 2001; Solomon,
2002). In relation to these market and purchase
characteristics, buyers have been assumed to focus on
functionality and characteristics of the market offering such
as price, quality, quantity, timing, services and availability
(e.g. Baily, 1998; Håkansson and Wootz, 1975). In light of
these assumptions, brands should indeed have little impact on
the industrial marketing process, given that brands, by
definition, are a matter of perceptual and emotional
subjectivity. However, connections to theory on industrial
 Corporate brand image in the selection of new subcontractors
Anna Blombäck and Björn Axelsson
buying behavior have shown that brands and brand
management nevertheless are relevant issues in industrial
markets (e.g. Bendixen et al., 2004; Hutton, 1997;
McDowell-Mudambi et al., 1997; Mudambi, 2002;
Thompson et al., 1997/1998).
Organization buying behavior
To understand more about the role of brands in a specific
market, it is necessary to investigate buyers’ behavior and
decision-making processes. Buying in B2B markets has been
described using a multitude of models, each including
various steps (e.g. Robinson et al., 1967; Webster and Wind,
1972; Wind and Thomas, 1980). Wind and Thomas (1980)
suggest that the number of steps and the effort put into each
of them are an outcome of the complexity of industrial
buying processes. McDowell-Mudambi et al. (1997) studied
the importance of brands in the industrial consumption
goods market by focusing on buyers’ decision making. They
call for more sector-specific research to discover how different
tangible and intangible attributes are actually valued and
whether the specific market’s characteristics affect this
valuation.
The logic of supplier evaluation in industrial markets is
that, in the end, any decision made should add value to the
buying organization and be financially feasible (Clow and
Baack, 2002). Given that B2B research has mainly ignored
the impact of emotional bonds, the traditional description of
the industrial buyer has focused on economic evaluation and
rationale (Lynch and de Chernatony, 2004). Studies on
buying behavior and processes, however, show that price
alone has limited significance in the evaluation and selection
of suppliers (e.g. Mummalaneni et al., 1996; McDowell-
Mudambi et al., 1997; Wilson, 1994). Thus, price too, in
combination with other measurable variables, does not
provide a satisfactory explanation. More comprehensive
perspectives on purchasing have developed which consider
value (Anderson and Narus, 1998, 1999) and total costs
(Ellram, 1995), including the value of functioning
relationships and indirect costs of obtaining, owning, using
and disposing a purchased product. Further, the ideas and
importance of continuous attitude formation through different
communication channels and types of information are more
accepted today (Lynch and de Chernatony, 2004). Related
fields of research, for example on corporate reputation and
image, have supported this development toward also taking
non-quantifiable dimensions into account.
The evaluation and selection process can be described as
being divided into several parts. First, buyers select a smaller
number of suppliers among the total array of firms that are
able to deliver what is requested. This group of selected firms
may be referred to as the evoked set (Morris et al., 2001), the
consideration set (e.g. Bonner and Calantone, 2005) or,
simply, the short list. Second, once further information has
been gathered, this initial list can be reduced to form a choice
set (e.g. Patterson and Dawes, 1999). Very few studies have
focused on the formation of choice sets in business markets
(Kauffman and Popkowski Leszczyc, 2005). With regard to
the importance ascribed to purchasing in industrial markets,
this is somewhat paradoxical, as this is where the choice of
suppliers is essentially made. Finally, buyers need to choose
which supplier(s) in the choice set to engage.
Research has shown how various types of information and
sources are used by industrial buyers in conducting an initial
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Volume 22 · Number 6 · 2007 · 418 –430
screening, evaluation and selection of available suppliers.
Examples include internal files, official lists of suppliers, word
of mouth, trade shows, brochures and advertising (Morris
et al., 2001), reputation, quality of presentation and
familiarity (Levitt, 1965; Möller and Laaksonen, 1986, cited
in Hutton, 1997, p. 429), personal contacts (Webster, 1970),
earlier performance, articles and other publications in the
trade press, computerized services, buyers from other markets
and trade fairs (Baily, 1998). While the initial screening
provides the buyer with limited information about the
company, Morris et al. (2001) suggest that B2B buyers
normally need to know more about the supplier, as the
products purchased are often critical to their operations.
Hence, when the evoked set of suppliers is examined further,
additional criteria such as production capability, quality
control, age of equipment, electronic advances and financial
stability can be used. Morris et al. (2001) suggest that buyers
can also evaluate production facilities, quality assurance
programs and the company’s management group. The criteria
applied should be based on, for example, the role of the
product/service (e.g. degree of criticality) in the buyer’s
sourcing strategy (Van Weele, 2005).
Shaw et al. (1989) state that psychological attributes are
widely used among buyers once quantifiable criteria have
been applied to select possible suppliers. Their study shows
that some buyers even consider intangible attributes related to
the selling party to be more important than product
performance. This could be interpreted as an effect of a
sourcing strategy focused on choosing a partner for future
cooperation in contrast to choosing a well-defined product for
a specific purpose.
B2B branding
As noted, research on industrial buying behavior has
indicated a wide variety of factors that can affect buyers
during stages of supplier nomination, evaluation and
selection. This means that at least the early stages of
purchasing in industrial markets can be affected by
perceptions and other factors quite peripheral to the actual
product/service offered. Because brands can represent both
functional and emotional values and because B2B buyers are
not guided solely by financial information, brands have an
interesting role to play in competitive B2B markets (Lynch
and de Chernatony, 2004). For suppliers, this means that it
may be important to manage a wide range of communication
channels.
Although B2B brands have gained increased recognition
since the 1990s (Egan et al., 1992; Keller, 1998; Malaval,
2001), the current limitations of research in the area are often
pointed out (e.g. Egan et al., 1992; Low and Blois, 2002;
McDowell-Mudambi et al., 1997). Nevertheless, an
increasing number of studies focusing on industrial
branding can be identified (e.g. Bendixen et al., 2004; Egan
et al., 1992; Firth, 1993; Gordon et al., 1993; Hutton, 1997;
Low and Blois, 2002; Michell et al., 2001; McDowell-
Mudambi et al., 1997; Mudambi, 2002; Rosenbröijer, 2001;
Saunders and Watt, 1979; Shipley and Howard, 1993;
Sinclair and Seward, 1988; Thompson et al., 1997/1998).
McQuiston (2004, p. 348), quoting Ward et al. (1999, p. 88),
concludes:
For the B2B marketer then, a brand can be defined as “. . . a distinctive
identity that differentiates a relevant, enduring, and credible promise of value
associated with a product, service, or organization and indicates the source
of that promise . . . ”
 Corporate brand image in the selection of new subcontractors
Anna Blombäck and Björn Axelsson
Purchase situation and brands
Available theories explain that buying behavior varies as a
function of the type of purchase being considered (e.g.
Axelsson, 1996; Malaval, 2001; Solomon, 2002). This
indicates that brands may be of varying importance
depending on what is being purchased. Research has shown
that price is a minor issue when buyers evaluate suppliers of
components and complex products. Quality, delivery and
performance history are more important criteria (Dickson,
1966). The fact that history matters implies that the buyer’s
image of a supplier can influence a decision regardless of the
current offer.
One explanation for this is that buyers need security when
planning for long-term contracts. This connects to Johnston
and Lewin’s (1996) argument that the vendor’s perceptions
are more important the higher the risk attributed to a
purchase situation. Further, Malaval (2001) argues that new
task purchasing is open to great brand influence, as the buyer
has no experience of that particular purchase.
It could also be argued that, even though B2B markets are
often characterized by stability and enduring relationships
(Ford et al., 2003), the new task/new supplier situation is
still quite frequent and significant. Dubois et al. (2003) have
shown how “normal” companies gradually replace suppliers
over time. This aggregate replacement activity is significant
and can affect considerable parts of the buying party’s
business as well as entire networks (Håkansson, 1993). This
further illustrates why it is necessary for B2B customers to
limit their risk-taking once in these situations.
Corporate brands
Because subcontractors have no products to brand, selection
of such firms implies a focus on corporate brands. These
differ from product brands in that they represent the firm, and
their image is potentially constructed by everything a firm is
perceived to be doing (e.g. Balmer, 2001; Balmer and Gray,
2003; Harris and de Chernatony, 2001; Kapferer, 2002).
Thus, corporate brand image is synonymous with the
company’s corporate image.
The rise of corporate branding has been greatly influenced
by product branding and, thus, has focused considerably on
the organization’s marketing function and how it should
design corporate communications (Schultz et al., 2005).
Schultz et al. (2005), however, identify a second path to
corporate branding; they maintain that corporate branding is
a process in which an organization’s many relationships are
central. Leitch and Richardson (2003) explain this by
stressing the importance of alliances and networks for
ventures in the new economy. They suggest that these
impede the ability to manage and single out the corporate
brand as a stand-alone entity, because the corporation’s brand
community must instead be considered. Schultz (2005)
further explains the complexity of corporate branding as it is
related to several theoretical disciplines (e.g. marketing,
strategy, communication and organization theory).
From this perspective, corporate branding constitutes
ongoing value creation, which is central to the organization,
but also important for its stakeholders, as it aids in
identifying the organization’s purpose and positions it in the
market.
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Volume 22 · Number 6 · 2007 · 418 –430
Research method
Qualitative research aims at studying a phenomenon in a
social context by perceiving and understanding it through the
individuals who are present in that context (Denzin and
Lincoln, 1994; Miles and Huberman, 1994). In order to
accomplish this, it is further suggested that data collection
methods must allow researchers to get close to the
investigated phenomenon and to enter the social context of
interest. With regard to this and the research question at
hand, the empirical study was designed as a qualitative
interview study.
Three Swedish subcontractors were selected and
approached. They were identified at a subcontractor trade
fair. They were all suppliers whose main business is
subcontracting. The companies’ main operations varied in
terms of materials, technologies utilized and customers
approached. They were, however, similar in that they
manufactured parts that were to be incorporated into
buyers’ products. The products were customized parts in
metal and/or plastic, which demand custom-made tools for
manufacturing. Due to the strategic importance these
subcontracted products can have, buyers’ selection of
vendor can be influenced by both supply and financial risks
(Van Weele, 2002). Further, while many suppliers can
manufacture the products in practice, once a decision has
been made for one firm, switching involves costs. Thus, the
current study does not concentrate on a particular industry,
but on a type of purchase, i.e. that of subcontracted products
that are a mixture of strategic and leverage items (Van Weele,
2002).
In order to capture both perspectives on subcontractor
selection, interviews were conducted both with suppliers and
with a selection of their customers. The subcontractor CEOs
were asked to identify two customer firms and a contact
person at each firm. Hence, in total, respondents from nine
firms participated. However, the focus of the current study is
not on the particular dyads – i.e. the relationships between
these subcontractors and their customers – but on the
representatives’ views on searching for, evaluating and
selecting new subcontractors.
In the subcontracting firms, respondents were selected by
the CEO after discussion with the researcher. In the customer
firms, the individuals approached to participate in the study
were selected based on our interaction with the contact
person provided by the subcontracting CEO. All respondents
were somehow involved either in sales (subcontractor side) or
purchasing (buyer side). Table I provides an overview of the
respondents.
By interviewing several persons from each organization,
richer data were collected, enabling a better understanding of
the complex phenomena involved. This multiple interview
approach can also help avoid single informant bias. A total of
23 individuals were interviewed using a mixture of personal,
group and telephone interviews. The choice to include group
interviews was mainly based on the convenience of this
method for respondents. Interviews were conducted over the
telephone on two occasions. Telephone and e-mail contacts
were also used at times to follow up personal interviews. All
interviews were carried out by the same person and lasted
between 40 minutes and two hours. All interviews were tape-
recorded and transcribed verbatim.
 Corporate brand image in the selection of new subcontractors Journal of Business & Industrial Marketing
Anna Blombäck and Björn Axelsson Volume 22 · Number 6 · 2007 · 418 –430

Table I Outline of respondents and number of interviews

Number and type of respondents Number and type of respondents Sum total
Subcontractors (number of interview occasions) Buyers (number of interview occasions) persons
Subcontractor 1 CEO (1), sales manager (1) production manager (1), 4 Buyer 1A Purchasing manager (1), purchaser (1) 2 9
production personnel (1)
Buyer 1B 2 purchasers (1 þ 1) 2
Subcontractor 2 CEO (1), sales manager (1) 2 Buyer 2A CEO (1), purchasing manager (1) 2 6
Buyer 2B Purchasing manager (1), purchaser (1) 2
Subcontractor 3 CEO (1), marketing manager (1), production manager (2) 3 Buyer 3A 3 purchasers (1 þ 1 þ 2) 3 9
Buyer 3B Purchaser (1), 2 project managers (1 þ 1) 3
Total 9 14 23

The interviews were semi-structured and non-standardized in
nature. Broad questions encouraging respondents to describe
how sales (subcontractor perspective) and purchasing
(customer perspective) are conducted were mixed with
questions specifically focused on a certain phase of the
buyers’ purchasing process. The logic of this approach is that
an understanding of brand impact and of what attributes are
relevant to industrial branding can be gained by looking at the
decision-making process in an attempt to understand what factors
affect the purchase. That is, rather than directly exposing the
brand as a main concept, the interviews focus on the function
of brands by trying to understand what affects buyers’
decision making (cf., for example, McDowell-Mudambi et al.,
1997; McQuiston, 2004; Mudambi, 2002; Thompson et al.,
1997/1998). Examples of the areas covered and questions
posed as starting points for discussion are presented in Table
II.
The interviews also probed into what types of information
and communication channels are perceived as most important
(cf., for example, Patti, 1977; Foster, 1998). Respondents,
however, were not asked to rank a set number of marketing
communication methods according to their significance for
behavior. Instead, their accounts were used to interpret what
factors influence them overall and not necessarily what factors
are most or least important. Psychology research supports this
method, as studies suggest that people generally have a hard
time describing their cognitive processes (e.g. Fischhoff et al.,
1982; Slovic et al., 1977). In this case, it implies problems
with recollecting how different factors influence decision-
making. Previous research also suggests that decision-makers
tend to exaggerate some factors while underestimating the
weight of others (Bruns, 2004). Thus, the current study
primarily aimed at obtaining respondents’ descriptions of
sales and purchasing processes and the kind of considerations
made, rather than at having them rank or describe key factors.
By asking respondents to describe their activities and
considerations related to sales, purchases and marketing in a
broader sense, it was possible to identify communication
effects that were not directly mentioned by the respondents as
being important corporate communications (e.g. while visits
to the plant and the significance of factory appearance were
emphasized in descriptions of sales/purchases, respondents

Table II Examples of interview areas and questions

Area
Facts about respondent
Descriptions of purchasing
(customers)
Descriptions of sales
(subcontractor)
Direct questions on marketing To cover the area of planned information search and marketing
communications
Purpose Examples of questions
To obtain information about the person’s involvement in and How long have you been in the company?
experience of sales/purchasing What is your position?
What does your work comprise?
To comprehend buying behavior and identify the possible impact of What happens when you realize that you need a
various types of information and communication channels new product – new supplier?
What is important when buying from – evaluating
a subcontractor?
How do you decide which suppliers are potential
ones?
Is word of mouth important for search –
evaluation?
To comprehend buying behavior and identify the possible impact of How do you sell – get in touch with new
various types of information and communication channels customers?
What do you perceive as important for your
customers?
Why do customers select you rather than your
competitors?
Are trade fairs important?
communications, and appreciate their relative (perceived) importance Can advertising be useful?
Do you use the internet?

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 Corporate brand image in the selection of new subcontractors
Anna Blombäck and Björn Axelsson
did not primarily consider the factory as a marketing or
communication channel). The focus on descriptions also
provided opportunities for supplementary questions.
Analysis of the interviews began by reading the transcribed
material several times, then highlighting and extracting those
parts that relate to the buyers’ selection processes. Based on
these excerpts, descriptions were written for each firm to
summarize the material. Based on these summaries, four
themes were identified that help explain why and how
corporate brands play a role in searching for, evaluating and
selecting subcontractors. During the analysis, the descriptions
and themes were constantly weighed against existing research
and literature in order to enable fruitful adaptation and
contributions.
Findings and analysis
The presentation is structured on the basis of four themes
that capture the ways in which corporate brands appear in this
situation and also why this is the case.
Theme 1: a competitive climate and stepwise selection
In order to understand what defines competition in a context,
it is necessary to understand what the buyers consider. That
is, a seller can only compete on things buyers perceive as
important. The current study suggests that buyers and sellers
are in agreement on what factors are important for being
considered as a subcontractor. One customer states:
Well, price and precision of delivery and, well, price, quality and precision
of delivery, those are really the three most important factors always, you
know . . ..
The study illustrates, however, that selection of new
subcontractors of strategic or leverage items is more
complex than what is indicated by these three factors.
Sometimes there is not even a ready-made contract, implying
that there is no price to estimate or evaluate. The selection
then concerns finding suppliers that qualify to be part of a
subcontractor portfolio. Further, the buyers often experience
a situation in which there are so many options that even
defining the short list of possible subcontractors requires a
selection process. Depending on how search and evaluation
are conducted, the type and sources of information used can
vary. The current respondents report processes similar to
those explained in theory, including identification of an
evoked set, reducing that to a choice set and selecting the
one(s) who qualify as subcontractors.
Several buyers explain how the very first selection can be
made through impressions from sales persons, trade fairs,
advertisements and the internet. Next, practical factors such
as geographical location and manufacturing capacity (size and
available machines) are mentioned as means to exclude
suppliers that do not qualify for the size or terms of a
contract. As the selection continues and the buyers need to
further reduce the group, aspects of both emotional and
functional character surface in the descriptions. Discussing a
new task situation when many suppliers are available, one
customer elaborates:
Yes [there are many], but then it’s like, we only want a few. So we don’t
approach many at the same time, but we might take four or five at most. And
then, if they aren’t up to standard we have to continue.
Researcher: And how do you choose those four or five suppliers?
Well, that’s, that’s really the feeling you have yourself.
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Price still appears to be salient to the final selection of who
gets a particular contract. However, a competitive climate
with several equally qualified suppliers initiates a stepwise
selection process when searching for new subcontractors. In
this process, search and evaluation can be too complex for
buyers to stick to straightforward quantitative parameters.
Consequently, for subcontractors, competition does not only
concern such factors, it also involves being noticed and
recognized as an interesting actor among many others.
Related to search on the internet, one purchaser says:
[The number of hits] vary, sometimes you get so many that you, after having
checked a few of them you have to consider yourself satisfied. There are far
too many.
His statement illustrates that relatively superficial impressions
can determine which suppliers will be involved in the
continued process – and which will not. This demonstrates
that even impressions of a supplier’s website can be crucial to
keeping the supplier in the process.
Theme 2: buyers’ limited rationality
Although interested in finding the most suitable supplier,
buyers generally experience some limitations in time and
resources, which constrain the search, evaluation and
selection process. A fully rational process could be
interpreted “as a long fully considered view of all
possible alternatives in order to obtain maximum
company profitability” (Brand, 1972, p. 81). However,
buyers can, at best, make decisions based on limited
rationality. As a consequence and as shown by the current
study, corporate image and reputation can function as a
catalyst for choice.
The customers studied report that they are unable to find
and evaluate all possible options due to time constraints.
Likewise, the information available about subcontractors may
be limited. Thus, selecting what subcontractors to focus on
may depend on less straightforward evaluation measures. As
one respondent explains, when asked whether the first
selection can be “completely rational”:
No-no, that’s impossible. It’s not possible, it’s more like an instinctive
feeling, how you feel about, well, “I’ve read something about this company.
I’ve heard something about this, and a colleague of mine mentioned
something”. And so on.
One recurring example of how to identify a new suitable
subcontractor is that buyers frequently interact with different
types of actors in the market. These can thereby affect the
selection of subcontractors. In this situation, contacts are not
primarily made with potential suppliers and the individuals in
those firms. Respondents report that, in order to locate
potential subcontractors, buyers sometimes discuss the matter
with their competitors (as they purchase similar products),
current subcontractors who offer similar products (as they are
up-to-date on the market) or suppliers of machinery or raw
materials to subcontractors (as they know which suppliers
have the experience or machinery to supply the products). In
relation to these interactions, it is clear that a firm’s reputation
can play an important role in the identification of new
subcontractors. One buyer says:
Yes, yes, it’s a lot about that, what you have heard about them and if they’ve
done a good job for someone else and such.
Another buyer points out how a supplier’s reputation within
the purchasing company can be important:
 Corporate brand image in the selection of new subcontractors
Anna Blombäck and Björn Axelsson
You can hear when talking with representatives from [another division] that,
“We have a supplier that is excellent at this”. And then you can sort of go
there to check, because then they’ve already been evaluated by [the other
division]. [. . .] And then it might be about reputation if someone says “No,
they’re a crappy supplier”, then we don’t care about them. But, on the other
hand, they might say that they’re a really good supplier and then you might
check them out.
The fact that a bad reputation can be devastating during this
early phase of selection is supported by another customer:
Yes, if you hear bad things then that’s not a supplier you approach directly.
Then it must have something no one else can manage to deliver. That’s what
I think. Personally I’m reluctant to go for a supplier when I have heard that,
“He is no good” [. . .].
The interview data, however, imply that the impact of
reputation decreases as the selection process moves along.
Once the buyers have chosen which subcontractors are to be
investigated further, they start forming an image of the
supplier that is not simply guided by reputation. The accounts
imply that first-hand impressions generally take the upper
hand. Still, if a subcontractor is not considered in this first
phase of selection, it is not likely to be considered at all. This
means that the impact of reputation may be essential, as it
represents the one piece of information the buyer has about
an unknown subcontractor, i.e. its current corporate image.
According to the buyers’ accounts, in order to save time
and resources spent on evaluation activities, they prefer to use
a limited range of sources to identify new possible
subcontractors. Available contacts are then preferable as
sources of information.
[. . .] if you search for something that you know [our current supplier] is not
interested in manufacturing, but it’s not far from what they do, perhaps a
particular type of plastic you need, instead of chasing after something
yourself, a journey into the blue, you call [the current supplier] to ask where
you can get hold of this plastic.
Another respondent clarifies that is has to do with saving time:
No, often you go to, to the ones who manufacture similar things and ask
them. That’s the fastest way.
Considering this type of search behavior, a subcontractor’s
image can be essential, both as it is perceived by potential
customers and by other actors in the market. The
subcontractor’s corporate image, i.e. what it is “known for”,
determines how other firms talk about it and whether it will
be recommended. These results indicate that the impact of
subcontractors’ corporate brands can be multifaceted and not
something that can be managed solely through marketing
communications aimed at customers.
Once a few firms have been identified as potential new
subcontractors, the selection process continues. While the
buyers report that the first selection often includes basic
practical issues such as geographical location and production
capacity, respondents’ accounts show how various criteria are
used in this prolonged evaluation. Here, several product-
peripheral factors appear to play potentially important roles.
According to the buyers’ reports, size and prestige of previous
customers, previously manufactured products and the history
of delivery precision are all examples of factors that are
considered.
Well then you look, partly, at what background they have, I mean what type
of customers they have. [. . .] It’s an advantage if you have worked for the
automotive side or at least a larger company, because then you know
something about the requirements when it comes to delivery precision and
such things.
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Correspondingly:
[. . .] If they can present their five largest customers and I feel that these are
the same customer segments we work with, you know, then you’re like,
“okay”, then you have advanced so to speak. If they can’t point at any special
customer, then you might start wondering.
This is another indication of the complexity of
subcontractors’ corporate brands. It connects well to the
idea that corporate brand management and analysis should
consider brand relationships and not only the corporate
identity of a single organization (Leitch and Richardson,
2003; Schultz et al., 2005). In this regard, current and
previous customers may be defined as being part of a brand
community, as they affect buyers’ perceptions of
subcontractors, i.e. their corporate image.
Another recurring aspect that seems to have a great
influence on buyers’ perceptions of subcontractors is the
appearance of suppliers’ plants. Apart from measures of
quality in production, one buyer explains:
Then what is also clearly important – how does it look when you visit the
company? We try at least to visit our large suppliers. How does it look, how
are you received and foremost, how do the production facilities look?
One buyer clarifies that even though impressions of
appearance can matter, it is not the look of people that is
important, but rather the look of things related to the
company’s production system:
Not the way they look or how they’re dressed. No. But how it looks around
the machines and how it looks on the floor and such things. That can be
important, yes.
Some respondents also noted that it is difficult to explain what
aspects of a plant inspection make a firm qualify as
interesting:
You look at what the plant looks like, what kind of machines they have, if
they, well what can I say? It’s hard to say what you really look at.
Respondents repeatedly explained that the importance of
these impressions was connected to the company’s quality.
One respondent explains:
[. . .] It kind of usually reflects how you [as a company] are in your general
behavior. If you have decent order like in terms of tidiness, then other things
are usually done in order. But if you have no order anywhere it’s not likely
that the company [performs well] in general.
Although not focused on subcontractors, Axelsson and
Wynstra’s (2002, p. 175) overview of aspects considered by
business buyers sheds some light on the above discussion of
appearances. They point out that product attributes do not
constitute the only important factor, emphasizing the
influence of supplier performance and, foremost, suppliers’
underlying capabilities. Axelsson and Wynstra (2002) suggest
that while supplier ratings are often based on quantitative
measurements, the audits made by buyers use qualitative
measures, as their objective is to find out more than the
supplier’s production capacities. In essence, buyers want to
evaluate a supplier’s ability to meet their overall and
individual demands. Because buyers’ resources (e.g. time
and information) are limited, they need to rely on proxies that
can help determine whether the subcontractor has this ability.
That is, to make these decisions, the buyers are required to
use limited rationality.
 Corporate brand image in the selection of new subcontractors
Anna Blombäck and Björn Axelsson
Theme 3: the influence of risk perception
Research has shown that perceptions of a company are more
important the more risk that is perceived in relation to a
purchase (Johnston and Lewin, 1996), and also that one way
to overcome the feeling of risk is to balance it with feelings of
trust (e.g. Axelsson, 1996; Selnes, 1998). Owing to, for
example, the relative complexity and cost of the purchasing
process, the buyers in the current study reported that they are
normally interested in long-term relationships with the
subcontractors. Also, buyers normally run operations
according to a just-in-time approach, which means they are
dependent on accurate deliveries.
The current study illustrates well how these financial and
supply risks (Van Weele, 2002) affect buyers’ behavior and
relationship with their suppliers. Given the characteristics of
the type of purchase considered, it appears difficult for buyers
to evaluate the product separate from the supplying firm (cf.
McDowell-Mudambi et al., 1997). One purchaser in our
study noted:
[. . .] Returning to this about relationships, it’s really important. Because it’s
like this, we don’t experience this as a customer-supplier relation really,
because we are so dependent on each other. We cannot get by without our
suppliers, and I mean if we have to stop our production for a day it costs
millions of millions. It costs so much money that we can’t postpone it for
even half an hour [. . .].
The selection of subcontractors is also affected by these risks.
One way of avoiding such risks is to choose subcontractors
who are well known and with whom one already has a
functioning relationship. One outcome of this search for
security is that the buyers may stick to a supplier even if there
is a less expensive offer. One customer comments:
You know that this works. And then, why should you trouble yourself with
something else? You save [a small amount], and get a lot of extra work and
quality problems and things that always appear with new suppliers.
However, as there are not always suitable suppliers available
in the company, the respondents also describe how
evaluations of new subcontractors often focus on the
trustworthiness of the supplier rather than on current
manufacturing capacity alone. This is reflected in how
buyers explain whether they primarily consider the product
or the firm when searching for a supplier:
It depends on what kind of product it is. [. . .] However, when considering
things like [firm X] makes, then we choose the companies. You know, there
is an unlimited number of [subcontractors], so then it is better to choose a
company that we know is ok. One who understands our requirements and
what we want, and we know what they can do.
One respondent describes how the firm’s assessments are very
detailed, reviewing “everything, from the CEO to the person
doing the cleaning up” in order to find subcontractors that
already function in every way. Yet another buyer says:
You look a lot at what kind of company it is. You have to have a company
that you can be sure you get your product. That you get it on time, that you
know they have a sense of quality. You must look for potential, that they can
continue delivering [. . .].
In sum, the study supports earlier findings on what situations
evoke risk for the customer. It also shows how buyers attempt
to manage this risk by constructing a sense of trust through
comprehensive evaluation. The present findings support Egan
et al.’s (1992) model of industrial branding by acknowledging
buyers’ focus on reducing uncertainty and risk. However, they
also add a practical dimension to the model by portraying not
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only which selection criteria are considered, but also how
these are applied in practice.
Theme 4: impact of human characteristics in the
absence of formal guidelines
Despite what the literature on industrial buyers has
sometimes indicated, the professional buyer is only human
and cannot avoid behaving as such. As humans we have a
limited capacity to process information, are in constant touch
with our emotions, create relationships with other individuals,
and are more or less risk averse. No matter how formal the
systems are that we create or how hard we try to act in an
unemotional way, there is no escaping the fact that buyers are
influenced by attitudes and values based on social and
personal considerations when they make evaluations
(Anderson and Narus, 1999; Clow and Baack, 2002). In
terms of corporate brand image and its impact on the
selection of subcontractors, this is related to the buyer’s
impressions of the company; such impressions are formed
when he/she meets with a subcontractor representative,
observes the subcontractor at a trade fair, examines the
subcontractor’s website or visits the manufacturing plant. The
present study gives examples of how these impressions can be
crucial to the subcontractors’ ability to remain in the selection
set.
Unless the buying firm has a highly formal evaluation
system for allowing suppliers to enter the buyer’s business, the
chances are that people’s impressions, images and
relationships will play a vital role in this process, by
determining which subcontractors will be considered from
the outset. In the current study, only the largest buyer, active
in the automotive industry, had a formalized system for new
subcontractor selection. This system involves the
subcontractor filling out a form and meeting a number of
requirements in order to qualify for being contacted at all.
However, even this company sometimes has to search for new
subcontractors “the hard way”, making visits to decide
whether the firm is “interesting enough”. Attempting to
explain what gives a feeling of confidence in a supplier, one
buyer says:
I believe it’s a feeling. I probably don’t have a clear answer for that. But it’s
an overall impression you know, that gives you that feeling. Do they have
different activity routines in the company? If they are good at that part
perhaps you should feel good, but sometimes you can still feel some
skepticism. Then it might be that this person doesn’t give a serious
impression. Then the personal issue can be what makes you [hesitate]. Or it
might be that you will become a very small customer [. . .].
The comment above shows how a mix of functional measures,
strategic considerations and the individual’s private emotions
impact the selection.
Conclusion
By taking a broad view of the brand concept, this paper
contributes to corporate brand theory and corporate
communications theory by exploring the relevance of this
concept in a specific context. Theoretically speaking, the basic
definition and relevance of the brand concept fully apply even
to companies that do not possess their own product and that
have no visibility in their customer’s product, as in the case of
the subcontractors investigated. Thus, this holds even in what
we earlier described as a worst case scenario for branding.
 Corporate brand image in the selection of new subcontractors
Anna Blombäck and Björn Axelsson
Likewise, the idea that images are created by various types of
communication also holds true in this context.
The current study concludes that corporate image and,
thus, corporate brands can have a salient role in the selection
of subcontractors, thereby adding to the breadth of corporate
brand research and theory. One could say, however, that
customers are primarily concerned with the product and its
functionalities. They want the right quantity and quality at the
right price and at the right time. However, due to difficulties
in verifying some of these aspects in a straightforward manner,
a supplier’s corporate image can vouch for its abilities in these
areas. The ways in which perceptions of subcontractors (and
their brands) are formed have been illustrated, resulting in the
following four conclusions.
.
Conclusion 1: The fact that there is a choice to make
between similar suppliers results in a stepwise selection
process in which various types of communication can play
a role. In the early phases, a poor appearance may exclude
even a very qualified supplier.
.
Conclusion 2: The fact that buyers have limited resources
allows reputation, product-peripheral factors and
impressions to function as substitutes for more objective
measures of subcontractors’ abilities.
.
Conclusion 3: The fact that buyers perceive risk increases
the significance of impressions and emotions related to the
subcontracting company as a whole during the selection
process.
.
Conclusion 4: The fact that companies consist of human
beings and that the selection process is only partly
formalized allows individual ideas and impressions to
influence the selection of subcontractors.
The results highlight the difficulty of distinguishing between
communication that mainly affects corporate image and
communication that mainly affects marketing results in terms
of sales. With regard to corporate and marketing
communications in industrial markets, the present study
therefore further supports the importance of taking a holistic
perspective on communication (e.g. Duncan, 2002; Olins,
1989; Van Riel, 1995; Åberg, 1990). As marketing
communications in the B2B area have gained more
attention, some studies have emphasized the difference
between media in terms of what effect they have on
different stages of the sales and purchasing process (e.g.
Lichtenthal and Eliaz, 2003; Patti et al., 1991). The relative
importance and efficiency of different marketing
communications have also been explored. Various
communication tools have been classified as having
“supporting” or “driving” roles for a transaction (Morris
et al., 2001). In an attempt to add to this list, others have
emphasized single media or communication strategies (e.g.
Lichtenthal et al., 2006). With a corporate brand perspective,
however, the focus is not solely concerned with the effect of
individual communication efforts. Rather, the matter of
interest is the sum of all communications, which results in a
corporate image (Balmer and Gray, 2003; Einwiller and Will,
2002). That is, this perspective refrains from a focus in which
the sole purpose of a particular communication is the creation
of awareness or liking or preference, etc. The corporate brand
perspective suggests that corporate image is essential to the
outcome of marketing by serving as a focal point (Hatch and
Schultz, 2003) that encapsulates a promise and an insurance
against poor performance (Balmer and Gray, 2003). Thus,
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Volume 22 · Number 6 · 2007 · 418 –430
any communication effort should be considered in terms of
how it affects the overall corporate image. This article shows
that such consideration is also relevant to the subcontractor
market.
While we are no longer surprised to learn that price as well
as product quality, terms of delivery, responsiveness to
customer needs and quality of supplier relationships can all
affect the final choice of subcontractor in relation to a specific
contract, these are not necessarily valuable measures during
the early phases of selection. In fact, when faced with a new
task situation or the need to locate a new subcontractor to
replace a previous one, the current study shows that buyers
frequently cannot rely on these criteria, as they are unknowns.
The study thus emphasizes the need to distinguish between
purchase selection criteria in general and criteria used for
search and qualification.
As noted, research on and models of decision-making in
industrial purchasing have mainly focused on final selection,
thus failing to recognize and study the preceding phases (De
Boer et al., 2001). The new task situation often implies lack of
previous contact between suppliers and buyers. One
assumption is that decisions are therefore guided mainly by
the supplier’s offer rather than by firm interaction and
supplier characteristics (De Boer et al., 2001). Malaval
(2001), on the other hand, proposes that new task purchasing
is open to great brand influence due to the lack of experience
with a supplier. The fact that subcontractors generally have
no ready product offer makes it difficult to evaluate the
product offer. We conclude that, although customers are
focused on the product outcome, the selection of a new
supplier is not mainly focused on tangible pieces of goods.
Instead, in line with what the subcontractor actually offers,
customers chiefly focus on a company’s abilities to make and
deliver the products (cf. Axelsson and Wynstra, 2002).
Consequently, the current study shows that although primary
selections for shortlists are not necessarily focused on the
product offer, they can be affected by production-related factors
(e.g. size, machinery and previous production). The emphasis
of evaluation, however, is on identifying a potential for
creating reliable and long-term relationships. In this process,
the product offer itself is not in focus, but instead the
company’s characteristics.
The present findings contribute to theory on selection
patterns in business markets by emphasizing that evaluation
for purchasing strategic or leverage items should not be
considered an issue of product evaluation, but one of firm
qualification. This appears to be a step-wise process, in which
practical and production-related factors do play a role, but
also playing a role is the ability to display a trustworthy
corporate brand image.
The role of corporate brand image, then, is not related to
emotions or irrational behavior in the sense of making
impulsive purchases based on feelings with no thorough
concern for the product and its price. Instead, the role brand
image plays is related to an evaluation that is highly concerned
with the product, but in which impressions of the company
are used as a proxy for quality (e.g. previous customers and
order). The study corroborates Lynch and de Chernatony’s
(2004) notion that the emotional function of brands in B2B
markets cannot outplay products and functional values.
Further, the current results show that the factors
influencing selection of a new subcontractor are not
constant. Depending on what search process a buyer
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Anna Blombäck and Björn Axelsson Volume 22 · Number 6 · 2007 · 418 –430

Table III Practical implications of the study

Phase of Information
selection Content Source Subcontractor translation
Search Which subcontractors are Trade fairs, internet, internet supplier Be visible and communicate what the
available in the area portals, advertisements, other company can do, make sure third party
considered? customers, other subcontractors, visits actors have the right image of the
from sales people company’s capabilities
Qualification Which of the recognized Size, location, financial stability, Communicate reference cases, financial
and suppliers are close enough, quantitative records of previous records, records of delivery and
evaluation large enough, good enough, manufacturing and deliveries, available production. Monitor appearance of
reliable enough, skilled machines, general reputation, factory and behavior of employees.
enough? Which ones have got certificates, management procedures, Communicate competence, display
the right machines and offer a word of mouth from other customers, certificates, and maintain a good image
quality high enough to supply employees, sales people, learning about among all customers
us? previous clients, visits to factory,
individual feelings
Decision Which subcontractor(s) should Summary of the above Summary of the above
be used for contracts in our
company?

adopts, his/her time resources and the information currently
available, the decisions made will be varyingly affected by
corporate image.
Limitations and future research
The current study has a number of limitations. Although the
focus on one type of purchase situation (new task) in one
context (subcontracting) allows for interesting situation-
specific contributions, it limits the general significance of
the findings. In order to better understand the impact of
corporate brands in business markets, research is needed that
focuses on complementary situations and contexts, e.g. the
relative importance of brands in modified or straight rebuy
situations in which supplier relationships exist. Interesting
contributions to the field could also be made through further
research on the brand impact in relation to purchase
importance, supply and financial risks.
Future research could also address the current trend in
purchasing, which focuses on the supplier’s role in generation
of value. Increasing maturity in this area includes the way
suppliers are used and made visible in the customer’s offer
(Van Weele, 2005). This trend implies a general change for
suppliers and subcontractors in terms of market offer,
position, communication and brand management.
In light of the current findings, future research on the
perceptions and use of corporate branding among
subcontractors would be interesting. Moreover, development
of brand management in business markets should be based on
studies that investigate and reveal the effects such corporate
branding efforts have on the supplier’s business.
Finally, in terms of organizational buying behavior, this
article supports the need for further investigation of the early
phases of selection in different purchase situations.
Managerial implications
Research on brands and communication in B2B markets is
still limited. By offering complementary illustrations of the
complexity of industrial buyer behavior, the current study
improves our understanding of why and how brands can play
a role in the subcontractor sector of this market, specifically in
the process of searching for new suppliers. The results have
implications for both subcontractors and their buyers and
suppliers.
The results imply that two sets of factors are important to
the subcontractor in terms of corporate brands and the
potential for being selected. First, there are the factors that are
essential to being considered in the first place (e.g. size,
geographical location, machines and materials in use). These
factors are highly important and could be considered the
hygiene factors for a buyer’s selection. Second, there are
factors that can give the subcontractor a competitive edge
among rival firms (e.g. production records, reference
customers, visual impressions and behavior). When faced
with the need to identify and select a new supplier of parts,
buyers often face many alternatives and hence cannot actively
pursue and assess all of them. They need to rely partly on
established corporate images. Consequently, subcontractors
cannot be content with simply having a characteristic or a
capability. They must practically illustrate or otherwise make
apparent their abilities through various types of
communication efforts. The current study identifies some of
the factors that affect customers’ impressions. More
systematic efforts to manage these should be highly relevant
to subcontractors (and other actors in business markets).
The findings can be further translated into practical
implications for the subcontractor by associating the
customer’s needs for information and ways of searching and
gaining that information with communication efforts on the
supplier’s side. Table III provides one point of departure for
such a discussion. It consists of three main variables:
1 the phase of the selection process;
2 the information of importance (the information content
and possible sources); and
3 the implication for (translation made by) the
subcontractor.
For buyers, the findings suggest that they could monitor the
selection process more carefully, as the logic of choices made
is not possible to explain. Still, buyers cannot completely
manage all aspects of the selection process. For

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 Corporate brand image in the selection of new subcontractors
Anna Blombäck and Björn Axelsson
subcontractors, the findings suggest the importance of making
their abilities explicit and applying methods of impression
management (e.g. corporate branding).
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About the authors
Anna Blombäck received her PhD in 2005 and has since then
been employed as research fellow at Jönköping International
Business School in Sweden. Her main research interests lie
within the fields of B2B marketing and marketing
communications, with particular focus on small and
medium sized firms.
Björn Axelsson is a Chaired Professor at the Stockholm
School of Economics. His research focuses on business-to-
business marketing and purchasing. He has written and co-
authored several internationally published books in the field,
the latest being Developing Sourcing Capabilities (Wiley
International, 2005) together with Wynstra and Rozemeijer.
An early contribution was Industrial Networks – A New View of
Reality (Routledge, 1992) with Geoffrey Easton. Björn
Axelsson is the corresponding author and can be contacted
at: bjorn.axelsson@hhs.se

Executive summary and
implications for managers
and executives
This summary has been provided to allow managers and executives
a rapid appreciation of the content of the issue. Those with a
particular interest in the topic may then read the issue in toto to
take advantage of the more comprehensive description of the
research undertaken and its results to get the full benefit of the
material present.
Branding is OK for business-to-consumer markets, but it’s
wasted in business-to-business where buyers make their
choices through objective decision-making processes which
are totally rational and unemotional. Wrong!
In any case, a “brand” is simply a name and a logo on a
product or service. Wrong!
And, even if we accept branding does have some relevance
to B2B, it’s only a small subset of marketing management.
Wrong!
Get the picture? Branding, being such an intangible
concept, is often dangerously misunderstood. Evaluating
and measuring brand and brand management success is
difficult and controversial as it’s not always possible to
attribute to them those hard facts and numbers that marketers
prefer. But it is a concept organizations should ignore at their
peril.
Hardly any company neglects the importance of brands in
B2C. To do so in B2B could be a costly mistake. B2B
branding and brand management will become increasingly
important; the future of brands will be the future of business
and probably the only major sustainable competitive
advantage.
Watch for China leapfrogging into the world market with
branding. For decades low-cost labour has given it a
dominant place in world manufacturing, and now Chinese
businesses are pursuing aggressive branding strategies
involving internal growth or acquiring foreign brand icons
and managing them. Both approaches could lead to world
success.
Intel famously recognized the importance of B2B branding
nearly 20 years ago when, because of the accelerating pace of
technological change as well as constantly growing sales rates
in the consumer market, the company decided to focus on
end users. They realized that establishing a brand was the
only way to stay ahead of competition.
Today, Intel is a leader in semiconductor manufacturing
and technology, supported and powered by their strong
brand, an almost unbeatable competitive advantage, due to
the ingredient branding approach and the campaign: “Intel
Inside”. An approach which will be important for the
increasingly sophisticated customers. But why are so many
other B2B companies not following good examples set by
companies such as Intel, FedEx, Boeing, Microsoft and
Siemens, which have some of the world’s strongest B2B
brands?
Journal of Business & Industrial Marketing
22/6 (2007) 431–436
q Emerald Group Publishing Limited [ISSN 0885-8624]
431
In “Being known or being one of many: the need for brand
management for business-to-business (B2B) companies”,
Philip Kotler and Waldemar Pfoertsch say:
Companies that once measured their worth strictly in terms of tangibles such
as factories, inventory, and cash have to revise their point of view and
embrace brands as the valuable and moreover equally important assets they
actually are (along with customers, patents, distribution, and human
capital).Companies can benefit tremendously from a vibrant brand and its
implicit promise of quality since it can provide them with the power to
command a premium price among customers and a premium stock price
among investors. Not only can it boost your earnings and cushion cyclical
downturns, it can even help you to become really special.
Brands serve exactly the same general purpose in B2B
markets as they do in consumer markets: they facilitate the
identification of products, services and businesses as well as
differentiate them from the competition. They are an effective
and compelling means to communicate the benefits and value
a product or service can provide. They are a guarantee of
quality, origin, and performance, thereby increasing the
perceived value to the customer and reducing the risk and
complexity involved in the buying decision.
Brands and brand management have spread far beyond the
traditional view of consumer-goods marketers. Brands are
increasingly important for companies in almost every
industry. Why? For one thing, the explosion of choices in
almost every area. Customers for everything from specialty
steel to software now face an overwhelming number of
potential suppliers. Too many to know them all, let alone to
check them out thoroughly.
The array of choice is expanded further by the internet and,
without trusted brands as touchstones, buyers would be
overwhelmed by an overload of information no matter what
they are looking for. But brands do not only offer orientation,
they have various benefits and advantages for customers as
well as the “brand parents”. They facilitate the access to new
markets by acting as ambassadors in a global economy.
Another important aspect of B2B branding is that brands
do not reach just your customers but all stakeholders –
investors, employees, partners, suppliers, competitors,
regulators, or members of your local community. Through a
well-managed brand a company receives greater coverage and
profile within the broker community.
Since a brand is reflected in everything the company does, a
holistic branding approach requires a strategic perspective.
This means that branding should always start at the top of
your business. If your branding efforts are to be successful, it
is not enough to assign a brand manager with a short-term job
horizon within the company.
Building, championing, supporting and protecting strong
brands is everyone’s job, starting with the CEO. Active
participation of leaders is indispensable because they are the
ones who ultimately will be driving the branding effort.
Brands and brand equity need to be recognized as the
strategic assets they really are, the basis of competitive
advantage and long-term profitability. It is crucial to align
brand and business strategy, something that can only
effectively be done if the brand is monitored and
championed closely by the top management of an
organization.
To appoint a Vice President of Branding, someone who is
responsible solely for brand management would be an
important step. No matter what the actual title, this person
should be the one person taking the required actions for
keeping the brand in line.
Strong leaders demonstrate their foresight for the brand,
make symbolic leadership gestures, and are prepared to
involve their business in acts of world statesmanship that go
 Executive summary
beyond the short run, and therefore require the sort of total
organizational commitment which only the CEO can lead.
No one can, however, guarantee that a business will realize
immediate benefits after implementing an overall brand
strategy. As branding needs a certain amount of investment, it
is probable that there will be a decline in net profits in the
short run. Branding is aimed at creating long-term, non-
tangible assets, not for boosting short-term sales.
The common view that branding in consumer markets is
based on emotional appeals, while logic and rationality
provide that base in B2B markets, is also challenged by David
Ballantyne and Robert Aitken in “Branding in B2B markets:
insights from the service-dominant logic of marketing”, which
says:
The idea that emotion as a social well-spring can be bracketed out of B2B
marketing decisions seems extreme to us, especially when B2B marketing
logic acknowledges the benefits of social relationships as a basis for
generating trust and commitment with customers and other stakeholders.
Understanding the emotional and cognitive interplay that
impacts on any brand image might be a matter of assessing
the degrees of emotional relevance, rather than assuming that
absolute rationality applies.
As it is possible to monitor and track brand image over time
in terms of performance criteria, firms should test the validity
of assumptions about the emotional appeal of brands in
particular market contexts.
Exploring how the service-dominant (S-D) logic of
marketing – in which goods essentially become services as
customers judge the worth of the service they receive from
those goods from “value in use”, Ballantyne and Aitken call
for more rigour and clarity in the use of the term “brand”.
Under S-D logic not only does branding become a
communicative interaction process, whereby firms attempt
to support the intended meanings of their value propositions,
brand value is confirmed or disconfirmed in use, at time of
use, as customers confirm or disconfirm the value
propositions in play.
While Kotler and Pfoertsch emphasize that brands cannot
be built by merely creating some fancy advertising and that
marketing promises must not be exaggerated, Ballantyne and
Aitken note that customers will make their most important
judgements of value received through direct service
interactions with supplier firms and on service-ability of
goods-in-use. Put another way, the time-logic of marketing
exchange is open-ended, from pre-sale service interaction to
post-sale value-in-use. This alone completely rearranges
branding opportunities and possible impacts.
S-D logic further suggests that it is the service experiences
of customers that most commonly impact on brand value,
through brand awareness and brand memory. Indeed, given
the potential longevity of brand preferences and brand
memory derived from historical experience, the importance of
the service-ability of goods becomes paramount in sustaining
the life of a brand (in all meanings of the term).
All product experiences and service perceptions meld with
brand associations over time, and this helps to consolidate the
reputation of firms in both their internal (employee) and
external (customer) markets. These dynamical changes also
impact on the perceptions of the wider community of a firm’s
stakeholders.
Consequently great customer service is a B2B firm’s
principal branding opportunity. This comes in two forms:
direct service interaction with a buyer company and indirect
service interaction through goods-in-use. Media advertising
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Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 431 –436
should have a useful but support role in brand building in
most B2B companies.
With S-D logic, the service experience of customers (direct
or indirect) leads in varying degrees to positive or negative
trust in the supplier firm and/or its goods and services. It
follows that judgements of value-in-use and resultant word-of-
mouth effects are the primary communicative sources of
brand awareness and meaning. Notwithstanding, media
advertising over the last 50 years has carried the weight of
brand building, and still does today. This is the conventional
branding logic, even to some extent for service.
However, B2B marketers should always explore the full
range of branding opportunities from media messages to
explanatory brochures and distinctive packaging through to
communicative interaction in the form of trade fairs and other
forms of dialogical interaction. That said, task capability
seems to be uppermost in buyer consideration in many
industrial markets rather more than developed product
characteristics. That is to say, buyers make judgements
about the future efficiencies, effectiveness, and networking
competencies of various suppliers.
Traditionally, industrial markets have not shown much
interest in developing brand communities of the consumer-
based variety (like those of Harley-Davidson and Saab) even
though the potential positive impact of encouraging web-
based brand communities in industrial markets could be even
greater than in consumer markets because business and
professional users may have a more committed interest in
exchanging product-related information with the supplier
company and amongst themselves.
S-D logic offers opportunities to connect with customers in
new ways, based on the specific use to which goods are put in
a buyer’s value-creating processes. This could mean new
dimensions of post-sale service and logistics service support.
The central S-D logic idea of goods as service applications
means that tracking the service experience of customers over
time and contributing additional service support is an open-
ended opportunity. These ideas are not new in service
industries but are less common in B2B contexts.
The relationship between a supplier and a customer or
another stakeholder evolves around a mutual and reciprocal
understanding of where value resides. Value is mutual when it
has benefits for all involved and reciprocal when value is co-
created. S-D logic lends itself to all forms of value creation
through co-operation, such as through co-design, co-
production, co-delivery and, in the context of this article,
especially co-branding. The opportunity for a more integrated
communication approach is thus broadened and deepened.
This in turn supports the development of an enhanced brand
image.
While deliberate and mutually-beneficial co-operation can
lead to enhanced brand-awareness and positive responses
from buyers – as in the Intel experience, dependence and
reliance on partner firms have potentially critical managerial
implications for a focal firm which has little control over its
partners’ actions.
It is therefore important to have information about what
factors can be controlled in moderating a relationship in
which your organization’s reputation can be harmed. In
“Branding implications of partner firm-focal firm
relationships in business-to-business service networks”,
Felicia Morgan, Dawn Deeter-Schmelz and Christopher
R. Moberg say:
For consumers, the notion of network coheres around an “experience”. The
primary question is whether the service network experience will cohere in a
 Executive summary
B2B context. Will the buying firm perceive the network as a whole and
interpret the co-produced service as a single process representative of a single
brand?
Or will the industrial buying firm recognize outsourced processes as
representative of separate brands? One can imagine a situation in which a
retailer purchases a manufacturer’s product from a distributor and receives
that product from a third-party transportation firm. Does the retail buyer
interpret this purchase as an experience or as a series of separate activities
provided by separate firms?
It is a question which has resonance with David Ballantyne’s
and Robert Aitken’s explanation of the blurring of the
differences between the experiences of buying goods and
services. Morgan et al. say that, while a customer buying a
computer from Dell will have interactions with third-party
providers such as UPS and after-sales service people, in a B2B
environment the process is more complex. The selling firm
may work with multiple members of a buying centre rather
than a single customer. Once a buyer and seller have entered
into an arrangement, customer satisfaction largely depends on
the service provided after the purchase or during the term of
the contract.
Much of the B2B buyer’s evaluation will be related to
logistics and customer service activities such as warehousing,
order fulfilment, order tracking, delivering the right product
at the right time, smooth installation, and accurate billing.
Product support in the forms of general service, warranties,
provision of spare parts, expert assistance, online assistance,
and field service is also more critical in a B2B environment in
which customers are dependent on suppliers to deliver the
services needed to operate.
The increased complexity of this process highlights time as
a potential difference between B2C and B2B, i.e. the total
time for delivering a co-produced B2B service is likely to be
longer than that for delivering a co-produced service in a
consumer setting.
Drawing attention to moderating effects of partner firm-
focal firm relationships, Morgan et al. say that, if partner firm
performance influences customer evaluations of a focal firm in
a B2B environment, as evidence suggests it does in B2C, then
selling firms would be advised to consider partner firms
carefully, keeping in mind that each brand touchpoint affects
the focal brand. Firms with similar cultures that demonstrate
a willingness to cooperate and coordinate activities to achieve
network goals would be good candidates.
Practitioners should also recognize the important role
customer contact personnel play in brand image and equity
development, whether those contact personnel be from the
focal firm or a partner firm. Practitioners representing the
focal firm could, for example, share hiring criteria and
training modules with partner firms as a means of ensuring
more consistent service delivery.
The authors’ proposed model highlights the importance of
a strong brand name, particularly if partner firms under-
perform. Certainly a strong brand name can be crucial to
organizational success, regardless of context. Still, the
strength of the brand takes on greater importance when that
brand could be affected by a partner firm. Industrial
organizations participating in service networks are therefore
advised to be aware of the brand image and the strength of
that image, and to consider likely ramifications if a partner
firm delivers poor service to a customer.
The focal firm also needs to be aware of the strength of the
brand relationships with partner firms. If the focal firm has
faith in the partner firm and customers perceive the link is
weak, the focal firm might take steps to build that
relationship. On the other hand, if the focal firm has less
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confidence in the partner firm, the focal firm may wish to
keep the relationship weak and/or find a new partner firm.
Practitioners will also need a clear understanding of which
services are perceived important by their customers – possibly
an expectation of good service from an outsourced service call
centre. By focusing on those service elements most important
to customers, the focal firm will be in a better position to
manage brand strength and brand image effectively.
With farmers having a reputation for being careful with
their money (“How many farmers does it take to change a
lightbulb? First you have to find a farmer who admits he can
afford a spare lightbulb”) it might be reasonable to suppose
that price, rather than brand name, would be the more
important factor in buying a tractor.
But you could be wrong. In “The importance of brand in
the industrial purchase decision: a case study of the UK
tractor market”, Keith Walley, Paul Custance, Sam Taylor,
Adam Lindgreen and Martin Hingley discovered that brand
name was a purchasing factor significantly ahead of price,
proximity of dealer and the quality of the dealer service.
A conclusion to draw is that manufacturers and distributors
need to maintain a strong image – something they might help
to pay for with the revenue from higher prices for the product.
Analyzing responses from UK farmers and farm
contractors, all three of the authors’ hypotheses (brand
name is not an important factor in the choice of tractors by
UK farmers and contractors; UK tractor buyers are not brand
loyal; and the major tractor brands available in the UK are
perceived in a relatively similar way) were rejected.
It is quite likely, however, that the high importance rating
given to “brand name” could be a result of “inertia” –
farmers familiar with a brand, satisfied with the product’s
performance, and consequently a decision to buy the same
brand being seen as a safe option. Closely related to buying
products on the basis of “inertia” is risk reduction, which is
generally believed to be a key factor in industrial purchase
decisions. Indeed, it is likely that the common practice in
industrial markets of using the manufacturer or company
name as the brand, with products being identified by sub-
brand names or numerical designations, is intended to
reassure prospective customers.
With regard to brand loyalty, with the exception of
respondents who owned Massey-Ferguson models, the
tractor owners awarded the highest utility scores to the
brand that they owned, which suggests they are brand-loyal.
The strong positive utility scores attached to the John Deere
brand by all groups of respondents suggest that this is the
“Rolls Royce” brand of the tractor market and provides
support to the contention that in industrial markets there is
often one brand that achieves a significant competitive
advantage on the basis of branding.
The anomaly concerning Massey-Ferguson could be
explained by a number of factors including reliability
problems, negative publicity surrounding the closure of the
AGCO manufacturing plant where they are made, and the
fact that Massey-Ferguson tractors were market leaders in the
1990s means that there are still large numbers on farms
despite farmers having bought other types of tractor more
recently. As such, respondents to the survey might be
classified as Massey-Ferguson owners even though they would
have scored the brand bought more recently better than the
Massey-Ferguson tractor.
Significantly, the two brands with the highest utility ratings
from their owner groups (John Deere and Valtra) also
 Executive summary
achieved the highest re-buy scores in a 2001 survey, further
supporting the contention that tractor buyers are brand loyal.
While for some customers price is the most important
purchase factor, for most it is not, so manufacturers and
distributors may be able to exploit this via higher prices,
particularly given the wide range of prices charged for the
various products.
Prior experience of a product through ownership can be
critical when a product is being considered for purchase.
Manufacturers and distributors are therefore advised to
market their current offerings to existing customers and
develop marketing strategies that will give potential new
customers experience of their product offerings. One example
of an experiential type marketing strategy is the on-farm
demonstrations that some manufacturers and dealers already
undertake.
While brand image, price, and brand loyalty play the key
roles in many tractor purchase decisions manufacturers and
distributors should note that dealers may act as important
intervening factors. Both the location of the dealership and
the quality of the service provided can enter into a customer’s
purchase decision and serve as important influencing factors.
Lastly, while these results apply to the purchase of
agricultural tractors, it would appear reasonable to assume
that this case is reasonably representative of industrial markets
in general and that the findings may be applied on a more
general basis. As such, it would appear possible to conclude
that branding can play an important role in industrial
purchase decisions.
Supporting a view that what farmers think about when they
buy a tractor holds true for other business-to-business
transactions, in “Branding the business marketing offer:
exploring brand attributes in business markets” Michael
Beverland, Julie Napoli, and Raisa Yakimova confirm that,
when brand equity is high, customers are often more prepared
to pay a price premium for the product and are more likely to
engage in favourable word-of-mouth communications
regarding the firm and its brands.
They also dismiss the belief that, because industrial
customers are thought to be more rational than end
consumers, and demand greater customization, brand
programmes are of little use to business marketers. On the
contrary, such programmes are crucial for corporate
performance as branded industrial products can provide
firms with cash-flow benefits and increased network power,
while enhancing corporate reputation and raising barriers to
entry.
Such strategies can establish points-of-difference for
industrial firms that help reflect the offer’s economic and
functional features, including quality, reliability and
performance, and salient intangible associations, such as
expertise and trustworthiness including a reputation for
“being world class”, “technical leadership”, and a “global
presence”. Furthermore, strategies to build brand image and
company reputation can enhance business customers’
perception of product and service quality and value, thereby
increasing loyalty.
Almost 21 per cent of North American business marketers
were focusing primarily on building brand awareness in 2006
– up from 17.5 per cent in 2005, yet insufficient consideration
has been given to what attributes business marketers can use
to build a strong brand identity.
Five pillars that underpin brand identity in industrial
markets are product, service and logistics (three core
components which are often imitable by competitors) and
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adaptation and advice, which are difficult to imitate and
reflect the intangible capabilities of the firm.
For industrial brands, a strong identity can be established
based around an individual element of the business market
offer or, alternatively, built using any combination of the five
components. The latter situation may provide a brand with a
more flexible and adaptable positioning, which can readily be
modified to meet the needs of different buyer segments.
Brand identity decisions should be made with consideration
to the type of customer using the firm’s products and services,
as well as the type of buying situation they face. As a
customer’s level of involvement in a buying situation increases
and the purchase decision becomes more complex, the basis
on which brand identity is built shifts from the tangible,
product-related benefits of the business marketing offer to the
more intangible, abstract associations.
Consequently, industrial marketers need to track the
evolution of their customers’ needs and purchase
requirements over time and ensure that the prevailing brand
identity reflects customer expectations.
The decision of whether to brand at the corporate or
individual product level is closely intertwined with the
selection of a suitable basis on which to establish brand
identity. As brand identity becomes more abstract – that is,
emphasis is placed on the intangible components of the
business offer – it becomes necessary for managers to draw
upon a host of products and services from within the firm to
deliver upon the brand promise.
Rather than develop a separate identity for each of the
individual brands offered by the firm, it may be more effective
to establish these abstract associations at the corporate level
and leverage them across to individual products within the
portfolio. In doing so, a rich and robust brand identity can be
created that helps reinforce a firm’s position as a “solutions
provider”.
Future research may be directed toward understanding the
antecedents to the development of a corporate versus
individual product brand identity in an industrial business
context, taking into consideration organizational, market,
product, and customer-related factors, and its consequences.
That necessity for manufacturers’ marketers to track and
monitor the evolution of their customers’ needs is clearly an
important factor of the business between manufacturers and
resellers – in the packaged goods retail sector for instance,
where actions leading to potential benefits for either party in
this interdependent and often complex relationship need to be
recognized and understood.
Benefits involve not only a linkage between manufacturers
and resellers, but also the end-customer who is the focus of
both manufacturer brand support and reseller marketing.
In “Sources of brand benefits in manufacturer-reseller B2B
relationships”, Mark S. Glynn, Judy Motion and Roderick
J. Brodie say the benefits manufacturer brands provide to
resellers reflect not only a manufacturer’s brand-name
strength, but the additional resources associated with the
brand such as advertising, promotional support and category
development.
While resellers need good relationships with manufacturers
to tap into their marketing expertise and budgets,
manufacturers need to develop good relationships with
resellers whose buying power has increased in recent years.
Another challenge for manufacturers in countering reseller
power is to differentiate their brands.
Conclusions were that reseller relationship outcomes for a
manufacturer’s brand are optimized when:
 Executive summary
.
resellers fully utilize the financial benefits associated with
that brand such as pricing and margins;
.
there are high levels of managerial benefits including
category development, consumer brand support, support
of the reseller’s promotions and marketing expertise
associated with that brand;
.
a reseller successfully meets the end-customer demand
associated with that brand; and
.
resellers fully utilize combinations of the financial,
managerial and consumer benefits associated with that
brand.
Additionally, a brand’s market share will moderate the effect
of the manufacturer brand benefits on reseller relationship
outcomes.
The first brand benefit is financial and, while all suppliers
potentially offer this benefit, its realization depends on how
well the reseller uses pricing and margins associated with the
brand. The second brand benefit focuses on how resellers use
the manufacturer resources (category development,
advertising, etc.) and the third relates to the end-customer’s
expectations of the reseller in terms of the assortment and the
brands themselves.
Manufacturers are concerned with the strategic value of
brands and recognize that good relationships with resellers are
necessary in realizing the value of the product offering. A
further implication is that these “sources of brand benefits”
influence the relationship outcomes for resellers. Brand
benefits can enhance a reseller’s satisfaction, trust and
commitment to the brand. Resellers also need to cooperate
with manufacturers to realize the benefits. By focusing on
such brand benefits to resellers, manufacturers can enhance a
buyer-seller relationship and use their market-based assets to
obtain a competitive advantage.
In terms of the manufacturer-reseller relationship, brands
are regarded as market-based assets by resellers. There is also
substantial knowledge exchange between manufacturers and
resellers of market information and category expertise.
The authors discovered that minor brands are also very
important to resellers not only in terms of the assortment, but
in countering the strength of major brands within the product
category. Also that, in the packaged goods sector, brands are a
key part of the B2B relationship between manufacturer and
reseller. Moreover, resellers too have an active role in brand
management, rather than just being one of passive support.
Retail buyers and store managers who participated in the
study considered that the main financial benefit for resellers
was to provide a good margin. They also reported that low
pricing often altered consumers’ expectations, so that a return
to the “normal” price resulted in decreased sales. There were
benefits in charging a premium for higher-status, minor
brands and particular variants in the brand’s range. Variants
offered a means to improve financial returns.
In balancing the need to optimize profit and satisfy their
customers’ demands, one telling comment was that:
Brands are actually what they [manufacturers] do, whereas we retail. We try
to meet the needs of our customers and buy whatever they really want. If
we’re looking at our products, we also look at the total market to see what
we’re missing out on. We make sure that we’ve got all the top-selling lines, so
we don’t just look internally, at our own range; we look outside and
benchmark against other ranges, make sure we’ve got the top lines.
This emphasizes the importance of assessing brand availability
and how this compares with competitors’ offerings.
Managerial benefits reflected the benefits of manufacturer
brands to enhance the operational aspects of the reseller’s
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business, excluding the financial or the reseller’s customer
benefits. The key themes identified were the manufacturer
development within the category, brand support, support of
the reseller’s promotional programme and other areas of
collaboration such as the sharing of manufacturer brand
expertise. Resellers regarded manufacturer product
development as a long-term benefit.
Although resellers regarded innovation within the category
as beyond their expertise, they were prepared to support the
manufacturer’s marketing activity. Lack of manufacturer
support was viewed as detrimental in terms of maintaining
market size and the interests of the end-customer.
Resellers’ store promotional programmes were important
and manufacturers were expected to contribute to these.
Resellers considered this type of support a necessity and that
the manufacturer’s cooperative advertising payment was tied
to the brand’s market share. The manufacturer’s salesforce
also provided product assistance in the form of shelf layouts
and the sharing of market information.
Despite the availability of scanner-based market
information for resellers, they often relied on the
manufacturer for the interpretation of market trends and
also collaborated with manufacturers to optimize store shelf
layouts for a brand.
Harmonious relationships with customers are also
important for developing B2B service brands – as is service
quality competence. In nearly all studies of industrial buying,
reputation usually appears as a top-four selection criterion.
The inference being that, although B2B literature in the past
might have made little explicit reference to branding, it has
always played a prominent implicit role via reputation.
In “Multiple roles of brands in business-to-business
services”, Jane Roberts and Bill Merrilees focus on leasing
mall space to retail tenants and emphasize that B2B firms
must build trust with their customers as responsive behaviour
and empowerment are seen as critical factors.
Key constructs of the study related to brand,
empowerment, trust, service quality, responsive behaviour
and lease contract renewal.
Brand relates to the overall performance and image of the
centre. It considers the consumer perspective in relation to
the centre brand, particularly, in the way consumers identify
the special or unique characteristics of the centre brand itself
and the strength in which they then feel the brand performs.
Empowerment relates to the way in which one party feels
able to direct their own actions towards a desirable outcome –
whether tenants feel they have some power in their dealings
with centre management and have a chance to have their
concerns heard.
Trust is generated when both parties can anticipate a
consistent level of performance and behaviour from each
other. It would mean that both parties would be satisfied that
the behaviour of the other party’s service quality dimensions
are met, that communication is open, relevant and timely, that
any disputes are dealt with appropriately and that any power
potential is used without any undue coercion.
Service quality relates to how well the core services
undertaken by one partner in the relationship are actually
performed compared with the expectation of how well the
service should be performed. The core services in the
shopping centre context relate to the performance of tangible
measures such as the landlord’s responsibility to maintain and
promote the centre, and provide an attractive retail mix.
Responsive behaviour reflects the way the landlord
responds to issues, provides information, consults and seeks
 Executive summary
feedback, and the timeliness and relevance of the information
provided. A large component of responsiveness is the way
both parties are able to communicate their needs. However,
communicating is one step. Being available for meaningful
communication to take place, responding to the issues raised
and following through with any commitments made, is as
essential as the communication itself. Responsiveness also
relates to the way in which centre management actively
promotes the relationship between itself and the tenants. It
considers whether centre management encourages positive
suggestions from tenants, nurtures and develops the
relationship and provides ongoing assistance to tenants.
Lease contract renewal relates to the strength of positive
feeling towards the centre, which is demonstrated through a
willingness to continue the relationship. This has most often
been measured in terms of intention for a consumer to
purchase a product from the same retailer/supplier again.
The results show that service quality is the most important
determinant of brand attitudes in the sample examined.
Consequently, companies wishing to build strong B2B service
brands should focus on delivering high levels of (appropriate)
service quality.
Branding had a major contribution to the renewal of
contract decision. In fact, strong brands were the most
important factor in the intended contract renewal decision
and the authors say that perhaps the most critical practical
implication of the study is the advocating of brand as the
centrepiece of any major customer retention programme.
Continuous B2B service relationships are likely to depend
on the service quality provided by the supplier. Service quality
was the main determinant of retail business tenants having a
positive brand attitude of the mall. Mall services generally are
provided on the basis of a long-term relationship, embedded
in a contract that is renegotiated every three to five years.
The contract provides a stable base to form such a long-
term relationship. Service quality reflects what can be
considered to be a competency capability on the part of the
mall manager. It is a core production skill that is essential for
any service provider. In this particular case it is the quality of
services, such as maintenance and promotion, which drive the
favourable (brand) attitudes that the tenants have of the mall.
Companies need to have suitable metrics for understanding
their brand strength and to continuously monitor this over
time. Strong brands appear to be the most powerful way of
maximizing customer retention. However, trust also
contributes to B2B service contract renewals. B2B service
firms can therefore supplement brand building with trust
building in a combined way to retain customers.
As if understanding the business customer, and
understanding how your brand and brand image can
influence the customer into doing business with you,
weren’t difficult enough, spare a thought for those
organizations whose market offering is defined and designed
by their customers.
Those organizations that, in essence, have no products of
their own, but make things according to buyers’ specifications.
Those organizations who do not know exactly what they are
selling until a buyer has asked for it and who don’t have
anything tangible of their own on which to stick a brand name
or logo.
How can these firms – subcontractors – set themselves
apart and succeed in becoming and retaining their position as
someone else’s selected suppliers? In “The role of corporate
brand image in the selection of new subcontractors”, Anna
Blombäck and Björn Axelsson suggest that increased efforts
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to develop firm capabilities, combined with a strong focus on
branding could be part of the answer.
Two sets of factors are important to the subcontractor in
terms of corporate brands and the potential for being selected.
First, there are the factors that are essential to being
considered in the first place (e.g. size, location, machines
and materials). Second, there are factors that can give the
subcontractor a competitive edge among rival firms (e.g.
production records, reference customers, visual impressions
and behaviour).
Faced with the need to identify and select a new supplier of
parts, buyers often have many alternatives and cannot pursue
and assess them all. They need to rely partly on established
corporate images. Consequently, subcontractors cannot be
content with simply having a characteristic or a capability.
They must practically illustrate or otherwise make apparent
their abilities through various types of communication efforts.
In the early stage of a selection process, buyers can be
influenced by impressions from salespersons, trade fairs,
advertisements and the internet. With several equally
qualified suppliers, it can be difficult for buyers to stick to
straightforward quantitative parameters in their selection.
Consequently, subcontractors need to get noticed.
Price can often be a relatively minor issue when buyers
evaluate suppliers of components and complex products, with
quality, delivery and performance history being the more
important criteria. Buyers need security when planning long-
term contracts, implying that the buyer’s image of a supplier
can influence a decision regardless of the current offer.
However, price can be significant in the final selection.
Corporate image and, thus, corporate brands can have a
salient role in the selection of subcontractors. One could say,
however, that customers are primarily concerned with the
product and its functionalities. They want the right quantity
and quality at the right price and at the right time. However,
due to difficulties in verifying some of these aspects in a
straightforward manner, a supplier’s corporate image can
vouch for its abilities in these areas. The ways in which
perceptions of subcontractors (and their brands) are formed
result in the following four conclusions:
1 The fact that there is a choice to make between similar
suppliers results in a stepwise selection process in which
various types of communication can play a role. In the
early phases, a poor appearance may exclude even a very
qualified supplier.
2 The fact that buyers have limited resources allows
reputation, product-peripheral factors and impressions
to function as substitutes for more objective measures of
subcontractors’ abilities.
3 The fact that buyers perceive risk increases the
significance of impressions and emotions related to the
subcontracting company as a whole during the selection
process.
4 The fact that companies consist of human beings and that
the selection process is only partly formalized allows
individual ideas and impressions to influence the selection
of subcontractors.
A conclusion that takes us right back to that initial statement
about business buyers making their choices through objective
decision-making processes which are totally rational and
unemotional. Wrong again!
(A précis of the special issue “Branding in industrial markets”.
Supplied by Marketing Consultants for Emerald.)