Branding & Brand Equity in B2B Market – Case of TataSteel

Anand G Khanna

To stay alive and flourish in B2B..

• Spend more time and money on research and development (R&D)

• Focus on making products smarter, faster, smaller, and more reliable than the competition's.

• Find ways to improve and add services so that they provide customers with a complete and satisfying experience.

Brand in B2B

• A brand is a shorthand descriptor of the promised value that a market offering delivers to target customers and a means of differentiating this value from that of the other marketing offerings.

Why Branding?

• Make intangible benefits tangible to target customers

• Built differentiation in near commodity markets• Achieve identity and preference with customer’s

customers• Differentiate market offerings that are same or

very similar core product but are augmented with different services, programs and systems.

Branding Matters????• B2B marketing communications world is characterized

by numbing sameness, commoditized feature wars and laundry-lists of product benefits

• Branding—allows a producer or owner to distinguish his/her goods or services.

• a strategic tool that helps the supplier cut through the morass of the market, get noticed, and connect with the customer on many levels and in ways that matter.

• A strong brand becomes the customer's "shorthand" for making good choices in a complex, risky, and confusing marketplace.

Cont…

• B2B marketing must follow the example of its consumer-focused counterpart and embrace the notion that a strong brand has the power to differentiate, build and protect those it represents in the face of incessant commoditization.

Branding is important because…

• Most B2B marketers have to address thousands of small businesses as well as enterprise customers. – They cannot do so economically using the

traditional direct sales force.

Branding is important because…

• If left unattended, individual managers will each do their own adhoc marketing.– The result will be a hodgepodge of corporate

logos, taglines and packaging. – Customers will be confused and the company will

look disorganized.

Branding is important because…

• B2B marketers are realizing that developing brand awareness among their customers’ customers can capture a larger share of channel margins and build loyalty that can protect them against lower-priced competitors.

Branding is important because…

• Selling through the channel requires a strong brand. – Channel partners need a brand to promote as

they (almost never) have a brand that businesses want to buy from.

– Business buyers are comfortable buying from a channel partner if they represent a brand with which the buyer is familiar.

Branding is important because…

• The brand is the tip of the arrow of marketing. – A strong brand enables the rest of the marketing

(and sales) to get through to the buyer. – The business buyer needs to know who the

company is before they’ll pay attention to what they have to say.

Branding is important because…

• A strong B2B brand enables a higher margin because – the “brand promise” provides a lower risk to the

decision maker, and enables that decision maker to justify their decision to others – because the brand is familiar to them as well.

– “Nobody ever got fired for buying from IBM” is the ultimate brand promise.

Welcome to The Steel Show

Steeling the Show

• "Branding will give rise to a customized product in terms of value, performance and pricing; it will meet our customers' needs better. Branding will go a long way in meeting the challenge of gaining a sustainable competitive edge."

• - Mr. B. Muthuraman, Managing Director - Tata Steel, in February 2003.

Steeling the Show

• In February 2003, Tata Steel invited the media to Goa for the nationwide launch of a brand.

• Brand launches are a regular affair for companies, but this was different - it was the launch of a Steelium - a new brand of steel.

• Tata Steel has been launching branded steel products since 2000.

Steeling the Show

• Company sources felt that branding Steel would help Tata Steel in two big ways:

1) It would help stabilize the flow of revenues even during business downturns.

2) It would make premium pricing possible.

Branding Steel

• The profitability of the steel industry in India is strongly linked to variations in the business cycle

• To reduce its dependence on external environment – TATA Steel adopted a two-pronged strategy of

• Branding its products• Moving to high value products

Branding Exercise

• Strong customer focus• 1990s – launched campaigns with taglines like• ‘Customer First – har haal mein’• ‘Customer ki kasam – Hai tayyar hum’• 2000 – set up branding task force • Segregated market development, order

generation and order fulfillment functions• Introduced Customer Account Managers

TATA Steel BrandsBrand Type Brands

Generic Brands TATA Bearings, TATA Pipes, TATA Agrico

Product Brands TATA Shaktee, TATA Tiscon, TATA Steelium

• Aimed at urban and semi-urban sectors, the brand promises 'trusted steel for your home‘

• Tata Shaktee offers to the consumer GC Sheets that 'Lasts Longest'.

• Tata Agrico products are the most sought after hand tools and implements in the country. The brand has been regarded a the prima donna in its category.

• Tata Bearings is a leader in the auto ancillary two-wheeler market segment. It has firm foothold in a fiercely competitive market.

• A new dimension in Steel Tube Technology opened up in India in the early 50’s with the establishment of the Indian Tube Company Ltd. (ITC).

• The 'steel with a soul, 'Tata Steelium' is the first branded Cold Rolled Steel product in India, if not in the world.

• The brand promises superior formability, flatness, surface quality, thickness consistency and strength.

• The country's vast auto ancillaries sector, which till date had to depend on overseas markets for its major needs, now has a credible option within the country.

Distribution Revamp

• 2002 – hired Booz Allen Hamilton• Hub and spoke Model• 2003 – shut down 12 stockyards• Established first hub in Jamshedpur• Next hubs – Sankrail (Kolkata), Vijaywada (AP),

Nagpur (MH), Delhi

Benefits ReapedYEAR FLAT PRODUCTS

(TATA Shaktee GC+ TATA Steelium)

LONG PRODUCTS(TATA Tiscon)

FP+LP

FY 01 5 11 7

FY 02 6 15 9

FY 03 8 19 12

Future Prospects

• Co-branding initiatives with its high-end customers such as Telco, Ashok Leyland

• Improving its product mix by introducing high-end products

• Focus on OEM and Construction sector• Extensive market research and channel

management initiatives

In a nutshell• You may have the most superior product offering in

your market, but if your market does not believe it, or if they do not know who you are or what you stand for, this will go largely ignored.

• Ultimately, business prospects demand facts. • However, they will also respond to an overt

recognition of their human propensity for emotional stimulation.

• At the very least, in the B2B environment a powerful brand will hold the attention of your prospects and convince them to process the facts.