This article explains the concept of brand equity in a specific industrial marketing setting.

Studies do point out cases where price and the hard tangible factors of the physical product do not fully explain the purchase decision.

The purpose of this study:

To explore the existence of brand equity in a specific business-to-business product setting;

To investigate the sources of brand equity and its appropriate communication channels;

The relative importance of brand relative to other purchase decision criteria.

BRAND

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 competition.”

BRAND EQUITY

Brand equity is the added value that endowed to products and services.

This value may be reflected in how consumers think, feel, and act with

respect to the brand, as well as the prices, market share and profitability

that the brand commands for the firm. Brand equity is an important

intangible asset that has psychological and financial value to the firm.

Aaker (1996) Keller (1998)

BRAND EQUITY

LOYALTY

AWARENESS

PERCEIVED QUALITY

ASSOCIATIONS

BRAND EQUITY

AWARENESS IMAGE

The competitive advantage of firms that have brands with high equity include the following:

a. A price premium can be attained

b. Increased demand by customers

c. Brands can be extended easily

d. Communications will be more readily accepted

e. There will be better trade leverage

f. Larger margins could be obtained

g. The company will be less vulnerable to competitive marketing actions

More recent studies found that branding in the business-to-business sectors were successful

Intangible aspects include factors :

Perceived quality,

Incomplete or conflicting information about the product,

Ease of ordering,

General reliability,

Willingness of the company to respond in an emergency,

Service quality,

Degree of rapport between customers and service providers,

Understanding between service providers and customers,

Company reputation,

Country of origin,

Pleasantness,

Trustworthiness of company personnel

P1: Brand equity exists in business-to-business markets in the form of buyers’ willingness to pay a price premium for their preferred brand (Hutton, 1997).

P2: Benefits from brand-loyal industrial buyers include their willingness to recommend the brand to peers and to give special consideration to another product with the same brand name (Hutton, 1997).

P3: Perceived quality is the primary brand-equity-generating variable (Michell et al., 2001)

P4: The primary source of information for building brand awareness are exhibitions and trade shows (Abratt, 1986).

P5: Different groups of decision-making unit role players attach different levels of importance to brands and prefer different communication channels (Ghinghold & Wilson, 1998).

The method used to gather information for this study

was a conjoint analysis experiment supplemented with a

self-administered questionnaire.

Conjoint analysis establishes the importance of features,

the utility of each level of each feature, and the preferred

option for each respondent.

METHODOLOGY

1. Selection of the field of experiment

The objective of the first part of the study was to explore empirically the

existence of brand equity in a specific business-to-

business product setting.

2. Derivation of variables

The research was conducted in two separate stages: the first stage was

qualitative. It aimed at deriving the variables needed for use in the second stage of data

collection.

3. Conjoint analysis

experiment

Data for conjoint analysis were collected during face

to face interviews.

METHODOLOGY

4. Methodology for the ‘‘halo

effect’’

One of the issues that this research

investigated was whether the goodwill

that certain brands enjoy in their current product lines could be

extended to new product lines.

5. Population

The population consisted of decision making unit (DMU)

members of industrial companies in South Africa that purchase

medium voltage electrical equipment.

6. Sample

The minimum sample size to be chosen took

into account the requirement for

conjoint analysis (at least 30) and for

Kruskall–Wallis (at least five in each DMU

role).

METHODOLOGY

7.Questionnaire construction

The questionnaire was divided into five parts:

1.Part was designed to record the results of the conjoint analysis experiment.

2.Consists of four questions designed to determine the respondent’s demographic characteristics.

3. Investigate the possibility of extension into a new product line where none of the brands was active in the South African market.

4. investigated the source of brand equity,

5. The questionnaire investigated the means of creating brand awareness and the willingness of respondents to recommend their preferred brands.

8. Data collection details

Data collection took place during the same face-to-face

session as the conjoint analysis. Together with the conjoint

analysis cards, each respondent was given a copy of the

questionnaire and one envelope in which to seal the

answers.

METHODOLOGY

There were 57 respondents that participated in the conjoint analysis experiment and the questionnaire. 3 respondents were disregarded due to errors they made in recording their conjoint analysis experiment. The 54 remaining respondents were used in the analysis.

Table 1

Shows the profile of respondent. All the respondents had more than 3 years of professional experience. 69 % had nine or more years experience. All the respondents had a technical or commercial and/or a financial background People from technical backgrounds were also in the majority among decision makers while the others were mainly buyers and gatekeepers.

RESULT

Table 2

MONANOVA was used to calculate the utilities of the various

levels of the different features.

Figure 1

The relative importance of features was calculated from utilities.

Delivery Period at 27%

Price at 24%

Technology at 19%

Brand at 16%

Spare parts at 14%

RESULT

Table 3 shows the utility ranges, total utility, and relative importance of attributes.

Table 4 shows the relative importance of attributes per role player category.

Table 5 contrasts the utility enjoyed by each of the brands with the willingness to consider new products bearing the same brand name.

Table 6 shows the raw scores for the selection of one’s preferred brand.

Respondents were asked to rate the importance of nine attributes on a Likert scale from 1 to 5, where 5 = very important and 1 = not important.

Table 7 rank the use of technical specialists as the most effective means of promoting a new brand.

The second column in Table 7 (total score) indicates the sum of scores collected by each medium of communication. Columns 3 to 7 represent the median value of scores collected by each medium of communication.

All the members of the buying center indicated their willingness to recommend their preferred brand. Decisionmakers and gatekeepers give a rating of 5, buyers 4.5, and users and technical specialists gave a 4 on the five-point scale.

RESULT

RESULT

RESULT

RESULT

RESULT

1. Importance of price and delivery

Price and delivery are very important. Delivery period came out as a more important attribute than price because of the wider range of variation specified for this attribute.

2. Importance of brand name

Conjoint analysis results indicated clearly that the brand name was not the most important attribute (save for the technical specialists)

3. Price premium for certain brands

the brand leader could afford a price premium 14% over relatively unknown brands on the market.

4. Impact of technical specialists on price premiums

on industrial buying in hightechnology markets demonstrated that ‘‘technical personnel dominated the buying process and that the involvement of the buying department was primarily administrative.’’

4. Differences in perception of brand-name importance among DMU role players

5. The halo effect: possibility of brand extension into new product lines

6. Perceived quality as a brand-generating variable

7. Price

8. Promotion of a new brand

DISCUSSION

Proposition 1 : Brand equity exists in the business-to-business markets, in the form of buyers’ willingness to pay a price premium for their favorite brand.

Proposition 2 : Other benefits from brand-loyal industrial buyers include their willingness to recommend that brand to peers and give special consideration to another product with the same name.

Proposition 3 : Investigated the principal brand-equity generating variable.

Proposition 4 : examined the best means to create brand awareness among potential customers.

Proposition 5 : was concerned about differences across role players in the DMU in relation to perceptions of brand importance and preferred channel of communications.

DISCUSSION

This study shows that in B2B marketing: Industrial marketers have something to gain by investing into building a likeable,

strong, and positive brand image among all stakeholders. It will allow the company to reap (albeit to a lesser degree) the same benefits that consumer marketers enjoy.

Quality is the main brand-equity-generating variable. Two lessons derive from this

finding. The one is that a quality claim may be effective only if there is substance to the claim. Industrial marketers have to make sure their efforts to build a positive brand image are not torn down by poor quality. The second lesson is that to create a quality product is not enough. Industrial marketers have to translate quality into perceived quality.

Industrial customers deliberately make it difficult for suppliers to determine who

is actually making the buying decision. Therefore, industrial marketers must create a positive image to all stakeholders that come into contact with the company. To achieve this, the supplier company must look beyond marketing communication and develop a total corporate communication program to build up the corporate brand.

DISCUSSION