Compared with the splashy and costly advertisements and promotional campaigns necessary in the B2C industry, B2B branding is a humble undertaking. An average B2B company spends about 1 percent of sales for their total marketing communications. The reasons for the relative silence among B2B companies lie in the industry’s traditional business structure: for years B2B companies have mainly depended on personal contacts; and they typically sold to a handful of regionally based customers who were already experts in the field. Given these perimeters, there was little need to spend extra money on branding.

Not so today. The above scenario is no longer always true, according to Waldemar Pfoertsch, CEIBS marketing professor and co-author of B2B Brand Management, because a growing percentage of business-to-business companies are seeking to expand beyond the traditional business model. In a globalized world, companies can access developing markets worldwide via the internet. For B2B companies that want to expand internationally and achieve above-average success, brand management is a must, says Pfoertsch.

Eleven years after the appearance of the first book on B2B brand management in 1995, Pfoertsch and marketing guru Philip Kolter produced B2B Brand Management in 2006, based on careful study of more than 50 successful international B2B companies and eight case studies including GE, Samsung, and Siemens. On March 19, the duo officially launched the Chinese language edition, with a press conference at the CEIBS-Lujiazui International Financial Research Centre.



When it debuted, B2B Brand Management was the first book to systematically analyze and interpret branding in the business-to-business context, Pfoertsch says. In it, the authors explain the entire process of B2B brand management from decision-making, strategy planning, and brand building to branding audit and branding pitfalls. Besides its theoretical value, the book also offers practical instructions supplied through its analysis of the cases of the most successful B2B branding companies.   

A veteran in the global business world, Pfoertsch has spent 10 years in industrial marketing, 10 years in consulting, and another 10 years in academia. His diverse career has taken him from his native Germany to North America, Africa and Asia. He brings his wealth of experience and first-hand insights to his courses, especially in the topic of B2B brand management. Pfoertsch’s friendship with Kellogg Business School Marketing Professor Philip Kotler began in 1990 when Pfoertsch became a visiting professor at the school while working in Chicago as a consultant. In 2006, Pfoertsch published Die Marke in der Mark (The Brand In the Brand), which resonated with Kotler and lead to the joint authorship of B2B Brand Management later that year.  

In the following interview with The LINK, Professor Pfoertsch discusses the benefits of managing a B2B brand, especially in China.   

TheLINK: Why is branding important in business-to-business?

Prof. Pfoertsch: In B2B, you always have personal contact so you can build trust with customers. But when you go international, it is very hard to establish trust because of the different languages, cultures, and lifestyles. So in business-to-business, particularly international business, branding is very important. The brand is the vehicle that helps you transfer the company’s image, emotions and trust. The brand opens doors before you are there. Customers know about you before you tell them, have an image of you before you give them the products. B2B is very rational, but nevertheless, very emotional. If you build the right brand, you can have repeat business, higher pricing, and sell more.
One important concept is that you also need to do branding inside your company. Let your employees understand the products and the value of the company. Your employees are the ones facing the customers. In B2B branding, there is a triangle: external communication between company and customers, internal communication between company and collaborators (employees) and intra communication between employees and customers. You must work in all directions to create solid brand management.

TheLINK: What are the differences and similarities between B2B brand management and B2C brand management?

Pfoertsch: There are strong similarities between B2B and B2C branding but of course, the B2B market and B2C market are very different. In B2C, you have a mass market. In B2B, you have very dedicated markets. In B2B, you don’t need big advertising campaigns, but specific communication. In B2C, you think short term ? a year is a long time for consumer products. In B2B business, you live long term ? one year is short; three years is not long. That means you need more stability than for B2C.

In B2C, you have a large budget. Normally, in consumer markets, 10 percent of total sales are used in marketing communications, including branding. In B2B, we use only 1 or 2 percent of sales on marketing ? 5 percent is high, and very unusual. You cannot afford the [advertising spend] you have in B2C business. That’s a huge difference.
Still, in terms of the underlying principles, B2B and B2C are the same: both depend upon emotions, relationships, image, and trust. And the management time, and effort, that you must spend are almost the same.

TheLINK: Does every B2B company need brand management?

Pfoertsch: When you are a small company, you don’t need so much. If you only have two customers, you don’t need to tell the rest of the world. But as you grow bigger and go outside your existing network, you need brand management. How can your customers find you without the right brand? Companies that need brand management can use a smaller communications budget but if you don’t do it at all, you are in trouble. Another important reason for branding: if you intend to sell your company or form a joint venture, the brand value adds to the company’s value.

TheLINK: What are the key steps to building a B2B brand?

Pfoertsch: We have built this book on a set of guiding principles which are the key steps of building a B2B brand. It all starts with the decision to brand or not to brand. This is a very crucial decision. The next step is using branding dimensions: the right name, right logo, right tagline, and the brand story. These are the brand elements that together form the visual identity of a brand.

Most B2B companies have a modest growth-rate throughout their lifetime. But if they take the right brand approach, they can accelerate their success. That is our theory.

TheLINK: What are the key elements leading to a successful B2B brand?

Pfoertsch: I recommend thorough planning, because if you don’t control the way you build your brand, you will have problems. Before planning, you have to do the analysis, find out what are the different needs and requirements of your customers, the obstacles and the potential. Based on this analysis, you build your strategy. The strategy could be very focused, like General Electric ? one company, one brand. But you also can work with more brands, if you have a clear value proposition and very distinct offering. The example we show is the trucks from Daimler AG. In Germany, they offer Mercedes-Benz trucks, in the U.S. they have Freightliner, in Brazil they have both, and in Japan, they sell Fuso trucks. We call that a house of brands. You need to decide which method to use.

Then there is execution of the brand management: Where do you promote your brand, how many fairs do you attend, how many advertisements do you create? And very importantly: how do you train your people? Branding is very much related to the personal understanding of the concept, and the CEO has to understand that. So you should do branding from top to bottom. Then there is brand audit. You have to control the brand, monitor the outcome. Does your logo stick in the minds of people? Do your employees understand your values?

TheLINK: In your book, you dedicate a whole chapter to explaining branding pitfalls. What are the major pitfalls companies need to avoid?

Pfoertsch: There are many pitfalls. The first pitfall is believing that “brand is something you own.” Actually, a brand only exists in the mind of the customers. What you own is only the ways in which the message reaches the mind of the customers. Some companies let consultants do the job. In the consumer industry, you see this very often. But for B2B it doesn’t work ? it’s deadly.

Pitfall Number 2: “Brands take care of themselves.” Not true. Brands need constant attention. Every day, you have to adjust, adapt, improve, continuously care about your brand.

Pitfall Number 3: “Brand awareness and brand relevance.” Brand awareness means many people know your brand. But more important is making the brand relevant to them. Relevance means, for example, I buy the Logitech mouse, because it’s better than the other ones. You have to get into the decision steps of people. Don’t wear blinders. It very often happens that, when a company is successful, they assume they will continue being successful. They don’t see exactly what’s happening. You can be blinded by your own brand, because you see it everywhere. That’s not a good thing. Sometimes, small and fast growing companies do change the world.

TheLINK: For the Chinese version of B2B Brand Management, were there any changes to the content?

Pfoertsch: We updated the data, added a new introduction and a new conclusion. The book will be very useful to Chinese companies, especially those seeking to enter overseas markets. I believe this because, when I came here, I found that many B2B companies in China are far behind their counterparts in Europe. This book provides the basic knowledge they need, and we believe this will be very helpful to Chinese companies. There will be another book specif ically dedicated to Chinese business-to-business companies next year.