XLRI SCHOOL OF BUSINESS AND HUMAN RESOURCES

BRAND MANAGEMENT FOR B2B BRANDS – CORPORATE BRANDS

A STUDY SUBMITTED

TO PROF. Sharad Sarin

B2B marketing

BY

GROUP # 6 Amit Kumar (G10006)

Bharat Parikh (G10014) Hussein H Rassiwalla (G10020)

Nikunj Verma (G10033) Vikash Chandra (G10059)

JAMSHEDPUR, JHARKHAND

26 JANUARY 2011

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Table of Contents

I. Overview ............................................................................................................................................... 3

II. Marketing Communication for B2B ...................................................................................................... 3

III. Recent Trends in Brand Management .............................................................................................. 4

i. Mergers and Acquisitions (M&A) .......................................................................................................... 4

ii. Use of Internet technology ................................................................................................................... 6

a. Company Websites ................................................................................ Error! Bookmark not defined.

b. Social Media .......................................................................................................................................... 6

c. eMarketplace ......................................................................................... Error! Bookmark not defined.

IV. Case Studies from Indian Context ..................................................................................................... 6

i. MindTree ............................................................................................................................................... 6

ii. MRF Tyres ............................................................................................................................................. 9

V. Bibliography ........................................................................................................................................ 12

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I. Overview

While a lot of B2C companies put considerable effort in building a brand very little attention has been paid by managers of B2B companies towards creating a brand. 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 (Kotler and Pfoertsch 2007). According to a research carried out by Chartered Institute of Marketing there is a lack of framework of best practice in industry and a lack of explicit brand management.

According to Sweeney (2002) some of the advantages provided by a brand in business context are:

Brands build trust

Brands add value, even in commodity markets, enabling companies to command a premium price and to avoid getting into a price war situation

Brands build loyalty by creating stronger customer relationships and reducing customer acquisition expense

Moreover with similar production technologies being available to all players and entry barriers for newer entrants falling the products and services are getting commoditized. Hence, creating stronger brands has become imperative for companies to differentiate themselves and to cut the clutter.

Sweeney (2002) lists four important stages at which brands can influence the buying center decision in a business to business scenario:

Decision on tender list

Preliminary shortlisting for negotiation

Decision to purchase

Decision on supply and support services

Given the influence of brands on buying center it becomes important to understand how brands are managed in a B2B situation. The rest of this document is aimed at providing an understanding of the B2B marketing communication, recent trends and advancements in the field of B2B brand management and providing a couple of examples from Indian context.

II. Marketing Communication for B2B

B2B non-personal methods of communication, including advertising, catalogues, the internet,

the trade shows, have a unique and often crucial role in the communication purpose.

Advertising and sales promotion are rarely used alone in the business to business setting but

are intertwined with the total communication strategy-particularly personal selling. Personal

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and non-personal forms of communication interact to inform key buying influencers. The

challenge for the business marketer is to create an advertising and sales promotion strategy

that effectively blends with personal selling in order to meet sales and profit objectives. The

advertising, online media and sales promotion tools must be integrated to achieve desired

results.

In a B2B scenario it is very difficult to measure direct sales increase in terms of

Rs./Advertisement budget. Advertising goals can be measured in terms of brand awareness,

recognition and buyers enquiry. It can be presumed achieving them stimulates sales volume for

B2B marketers.

Advertising media is selected on the basis of their circulation. The internet provides a powerful

medium to communicate with target customers. Communicating the customers need is not

only relevant to but a necessity in B2B scenario. This is highlighted in following example:

Caterpillar is a leading machine manufacturer of earth moving equipment. This space is

crowded by many heavy machinery factories like Komatsu, Hitachi, Volvo, New Holland,

Caterpillar, etc. All of these manufacturers produce qualified products. But, Caterpillar leads the

sales. Its products are used everywhere in the world. The customer might use the machinery in

jungle or in the middle of the sea. Caterpillar knows and understands this unique need of the

customer. The company communicates the assurance of spare part availability at hard to reach

places through following tagline: “48 Hours Part Service Anywhere in the world or Caterpillar

Pays”. This assurance of spare part availability has instilled great confidence into its customers

and differentiated Caterpillar’s offerings from its competitors.

III. Recent Trends in Brand Management

i. Mergers and Acquisitions (M&A)

Hsiang-Ming Lee, Ching- Chi Lee and Cou-Chen Wu have examined the effect of M&A on brand images and brand equities of the merging companies. The study focused on M&A cases where the acquirer-dominant is affiliated to a weak brand image and the acquired one has a stronger brand image. The result of the research study indicates that greater the perceived differences between acquirers and acquired brands, the more the brand equity of the acquirer will increase. In addition, all the dimensions of brand equity for the brand with a superior image decrease significantly.

The study cites example of Tata Motors Limited from India acquiring Jaguar Cars Limited and

Land Rover in 2008. This acquisition by Tata Motors was not only aimed at entering luxury car

segment but also was a strategic move to create a global brand presence and further enhance

its brand image in India.

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The total number of M&A deals executed in India between the months of January to May in

year 2007 was 287. There was a monetary transaction of US $47.37 billion involved in these

deals. Out of the 287 M&A deals, there have been 102 cross country deals with a total valuation

of US $28.19 billion. Apart from the acquisition done by Tata Motors some of the other

prominent deals witnessed are Hindalco acquiring Canada based Novelis, Dr. Reddy’s Labs

acquiring Betapharm, Ranbaxy Labs acquiring Terapia SA, Bharti Airtel acquiring Zain Africa etc.

M&A is an inorganic growth strategy adopted by many organizations to increase their capacity

and competitiveness. According to Schweizer (2005) M&A can enable the acquiring company to

obtain:

Complementary technologies of the acquired company

New products

Distribution channels of the acquired company

Desirable market positions

In addition to reaping above mentioned benefits an organization can strategically acquire a

company which can provide brand extension to the acquirer and provide following benefits

related to branding:

Provide a readymade brand in an established market thus reducing the “time-to-

market” for acquirer

Provides a better understanding of the target market in terms of brand preference and

buying behavior

Can act as an entry point in a market which is outside acquirer’s country (cases of cross

country M&A)

Boosts the brand image of the existing brands that are present in acquirer’s portfolio

Provides an opportunity for rationalization of brand portfolio

With M&A providing these branding related benefits in addition to the other strategic benefits

it remains a preferred alternative for B2B companies to manager their brands.

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ii. Use of Internet technology

a. Social Media

b. eMarketing

IV. Case Studies from Indian Context

i. MindTree

Amongst Indian IT companies that are taking their growth forward without yielding to the

financial pressure faced from all corners MindTree Consulting is leading the pack. MindTree is

a medium sized company and has shown tremendous growth in the IT space. Even though it

started in 1999, it went public in just 7 years (2006), all due to its growth strategies. Its focus

has been on reducing costs and improving operational efficiency, with an eye toward staying

lean and in shape to be able to compete effectively. It was always conscious about its

positioning and MindTree brand through the years has been as the “best mid-size company

out of India.”

As per MindTree’s management Brand is a very emotional topic. Most of its top management

has essentially been with the Company since day one (August 1999). This is not an

exaggeration: not only are all 10 co-founders still with MindTree, but of the first 150 people

to join, they’ve lost only 2 or 3 “MindTree Minds”. The stability they’ve had makes the brand

discussions very personal.

MindTree’s Visual Identity: The Logo

There is one thing that strikes a common chord with all the employees. And that is

MindTree’s commitment to social responsibility. The depiction of MindTree’s

DNA begins from the company’s logo. MindTree's logo was created by a

student, Chetan K.S., who has cerebral palsy. The visual identity for MindTree

and its facility is replete with digitally expanded drawings of the students of

the Spastic Society of Karnataka’s School with which MindTree has a

longstanding relationship. In the logo the red stands for action. The bright

yellow bubbles represent joy something which is followed in its true spirit.

The decisive skyward, blue brush stroke is Chetan's way of communicating

imagination. No wonder, MindTree minds promote the tradition of being

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socially sensitive and nurture values.

For strong brands Customer’s experience and internal alignment is very important

In today’s context Branding is more about making a promise and creating a culture within the

organization that allows a fulfillment of this promise fostered. Branding can therefore be

viewed as an experience of the customer and other key stakeholders. People branding or

internal branding initiatives are especially relevant to knowledge based industries such as IT

and BPO as people are the brand ambassadors with the maximum influence on how the

brand is perceived. This is one idea which MindTree adopted from its initial days.

For a branding strategy to be successful, MindTree realized that it is imperative that its

employee management be well-aligned with the company’s overall business objective. The

Mission, Vision and Values that shows the direction in which a company should move forward

also has this philosophy imbibed. It reads “We will deliver business enabling software

solutions, by creating partnership with our customers, in a joyous environment for our

people”, a mission that places people (employees) at a strategic position in the organization.

At MindTree branding starts from within: People Practices

A company that has successfully built a brand from “within” is MindTree Consulting. Known

for its people friendly processes, MindTree was ranked among the top employers for (two

consecutive years, 2003, 2004.) Not surprising, MindTree likes to address its employees as

MindTree Minds. At the core of the People Practices at MindTree are its Values & DNA. The

values of Caring, Learning, Achieving, Sharing and Social Responsibility (CLASS) were crafted

by the employees of MindTree.

Since employees are a critical part of this “customer experience”, it is imperative that they

help reinforce the brand at every point of interaction. To make this possible the company has

to make the employees buy-in to the promise to deliver. So, how did MindTree achieve

employee buy-in? Surprisingly, it is the same set of HR processes that help employees buy-in.

The difference, however, lies in the implementation. The HR practices, in all possible ways,

communicate what the company stands for, i.e. its promises and how valuable the employees

are for the company. The take away from MindTree’s experience is that success comes from

taking care of the fundamentals, taking care of the details and adopting a holistic approach to

a situation.

Brand with a Conscience

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MindTree is committed to the pursuit of better living for people with disabilities and

enhancement in the quality of primary education. Working on the leading edge of technology

innovation, MindTree firmly believes it can add significant value through assistive

technologies in achieving these goals. MindTree Foundation provides the platform to

channelize these initiatives. The core mission of this non-profit organization is to ‘Support

primary education and the cause of differently-abled people by leveraging MindTree’s

leadership, values, and resources’.

MindTree Foundation’s charter supports 3 broad initiatives:

a. People with disabilities (with specific focus on Assistive Technologies)

MindTree support the development and dissemination of assistive technologies to address

the needs of people with different types of disabilities – muscular, visual, hearing and learning

disabilities. The initiative was launched with an engagement with Spastics Society of

Karnataka (SSK). The foundation will also work closely with educational institutions like IITs,

identify promising technologies available in their labs and help bring these technologies to the

market by leveraging MindTree’s engineering capabilities and partner ecosystem.

b. Primary Education

By focusing on primary education, MindTree believes that a higher impact can be achieved in

building a better foundation for future. The charter provides a formal platform to execute

such an initiative. The company has been supporting schools for their infrastructure,

curriculum development, and employment of additional teaching staff and training of

teachers.

c. Mindshare

Mindshare is an initiative across MindTree’s global footprint. Wherever they are on the map,

this initiative helps them identify specific areas where MindTree Minds can contribute to the

society. Each location is anchored by a Catalyst who will identify and connect MindTree Minds

to volunteer with social sector organizations. The significant aspect of this program is that this

will ensure each MindTree Mind who volunteers for this program personally interacts with

the beneficiary. The objective is to share time, attention, and affection with these people to

make them feel special.

Managing Brand starts with Managing Business

For a brand to really resonate with its customers apart from strong branding it’s very

important to live up to the expectation that a strong Brand brings. This can’t be done better

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than by delivering on promises on business front and exceeding expectations of your

customers. MindTree Consulting is an international IT-consulting company that delivers

affordable business and technology solutions through global software development.

It designs enterprise applications, using a world-class methodology, for business-to-business

and business-to-consumer applications. These applications are built to leverage emerging and

classic communication channels. It is into defining business needs to building an e-solution

using best-of-breed tools and technologies

It truly lives up to its tagline: “Deliver business-enabling solutions and technologies by

creating partnership with our customers in a joyous environment for our people”

ii. MRF Tyres

MRF (Madras Rubber Factory) is the market leader among tyre manufacturers in India, with a

24% share terms of revenues. Its leadership position, coupled with its strong brand recall and

high quality, MRF commands the price-maker status. MRF has a strong presence in the T&B

segment, the largest segment of the tyre industry, and commands around 19% market share

in the segment. It is the leader in the two/ three-wheeler segment and tractor front tyres, and

holds second place in the passenger cars and tractor - rear tyres. Exports account for around

12% of the gross sales in MRF.

Products

MRF is the leading manufacturer of tyres for almost all segments. Being driven by technology

and product innovation, every tyre that comes out is of the highest standards and tested to

weather the toughest conditions on any road. With more than 85 tyre variants, MRF holds the

highest market share of 22% in terms of sales volume in the tyre industry.

Apart from tyre manufacturing tyres, MRF also manufactures its MUSCLEFLEX brand of

Conveyor Belting at one of the most advanced, State of the Art, Facilities in India.

Incorporating the latest manufacturing techniques, MUSCLEFLEX-Conveyor Belting has gained

rapid acceptance in markets worldwide. MRF PRETREADS is yet another innovation from MRF

Industries which is the most advanced pre-cured retreading system in India. MRF forayed into

retreading as far back as 1970. Today, MRF has perfected the art of recurred retreading with

its extensive knowledge in tyres and rubber. MRF’s diverse business interests also include

Paint and Coats, and Toys.

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Brand recognition and brand recall

The MRF mascot, the MRF muscleman, clearly states the category membership MRF

subscribes to. MRF communicates to the customer its superior endurance and strength.

When it comes to top-of-mind brand recall, MRF beats the rest of the competition hands down. Unlike Bridgestone India, MRF has for long concentrated on aggressive brand promotion. Sports celebrities and event endorsements have been a major vehicle for their brand promotion activities. From signing on three sports heavyweights at one go (Sachin Tendulkar, Brian Lara, and Steve Waugh), to endorsing national rally circuits, to founding the MRF pace foundation, MRF has been at the forefront of aggressive brand building, one reason why MRF commands more brand recognition than Bridgestone India, despite the latter’s superior quality and international credentials.

The company sponsors a number of sports such

as cricket and rally racing, to position its tyres as

high endurance and sporty. Its slogan “Tyres we

race, are the tyres you buy” stands testimony to

their category membership

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MRF: The Advertising Way

MRF uses advertising as the primary medium to reach out to its customers. The company

invests heavily on print, TV and outdoor media, to drive its brand into the minds of the

customer. MRF is credit with devising some of the most creative ads ever made for an Indian

tyre company. It allots a huge budget outlay for advertisements and other promotional

activities. Its mascot, the MRF muscleman along with its slogan “Tyres with muscle” was once

one of the most recognizable advertising campaigns in Indian advertising history. It was

specially devised at Lintas by its CEO, Alyque Padamsee himself. Allyque and his team

painstakingly surveyed scores of truck drivers at road side dhabas to understand their needs

and wants.

MRF takes care to promote its tyres as tough, reliable and high endurance. This is because its

main share of customers comes from the Light and Heavy Commercial vehicles segment.

Truck and bus owners in this segment consider strength and endurance as the No.1 factor

desirable in a tyre. For the passenger and two-wheeler segment, MRF promotes itself as a

high quality and high performance tyre manufacturer.

MRF is also well known for founding the MRF Pace

Foundation, which is today one of the premier training

institute for India’s budding pace bowlers. Though cricket,

given its cult like status, gave MRF a lot of publicity, it was

its sponsorship of auto-racing projected its slogan, “Tyres

with Muscle” and outlined the quality of its tyres and

allied products.

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V. Bibliography

Published Resources

Kotler, Philip and Pfoertsch, Waldemar (2007), “Being known or being one of many”, Journal of Business & Industrial Marketing, Vol. 22 No. 6, pp. 357-362.

Lee, Hsiang-Ming; Lee, Ching-Chi and Wu, Cou-Chen (2011), “Brand Image Strategy Affects Brand Equity after M&A”, European Journal of Marketing, Vol. 45, Issue 7/8.

Schweizer, L. (2005), “Organization integration of acquired biotechnology companies into pharmaceutical companies: The need for a hybrid approach”, Academy of Management Journal, Vol.48 No.6, pp.1051-1074.

Sweeney, Brian (2002), “B2B brand management”, Brand Strategy, September Issue

WWW Resources

J.D. Power Asia Pacific 2011 India Original

Equipment Tire Customer Satisfaction Index

(TCSI) Study SM has revealed MRF to be the

most satisfying OEM tire company in the

country. The study, now in its eleventh year,

measures satisfaction among original equipment

tire owners during the first 12 to 24 months of

ownership. The study measures overall

satisfaction by examining four factors (listed in

the order of importance): appearance,

durability, traction/handling, and ride. Overall

satisfaction in 2011 averages 822 on a 1,000-

point scale, an improvement of 24 points

compared with 2010. MRF has improved by 23

points from 2010 by achieving a score of 833 &

performing well in the appearance factor. Apollo

follows MRF in the rankings with a score of 830.

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http://www.economywatch.com/mergers-acquisitions/india.html

http://www.mindtree.com/about-us/mindtree/about-mindtree

http://www.mindtree.com/blogs/the-true-%E2%80%9Cbrand%E2%80%9D-of-a-company

http://www.mindtreefoundation.org/Pages/Home.aspx

http://www.karmayog.org/csr2010/csrall/csrdetails.aspx?id=459

http://www.thehindubusinessline.com/companies/article1487056.ece