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Thomas Dmoch 
Measurement of Brand Strength 
of industrial Goods
Dmoch/06/12/14/Page 2 
Table of content 
Definitions 
– industrial goods 
– brand strength 
Methods of brand strength measurement 
Application
Dmoch/06/12/14/Page 3 
DEFINITIONS METHODS OF BRAND STRENGHT MEASUREMENT APPLICATION 
Definitions
Dmoch/06/12/14/Page 4 
Industrial Goods 
Objects of branding 
Industrial goods Consumer goods 
Industrial durables Expandable goods 
Component parts Not component 
Raw 
materials 
Auxiliary 
materials 
Ingredient 
parts 
Destination 
Consumption 
Integration 
Manufacturing level
Dmoch/06/12/14/Page 5 
Industrial buying behaviour 
Customers are organisations 
– Formalised decision making 
– Buying Centre 
–Demand depends on 
downstream markets 
Specific solutions found in 
interactive process 
Market transparency 
Long-time relationships 
Misunderstandings 
–Always highly involved 
–Rational and calculative 
–Not susceptible to emotions 
–Don’t care about brand names
Dmoch/06/12/14/Page 6 
Subjectivity in industrial buying behaviour 
Test with industrial buyers 
Select the best industrial product 
Different products, thereof 2 with 
– Equivalent functionality 
– Equivalent quality 
– Equivalent price 
– But: one with standard design, one with 
appealing design 
Result: 
First choice for 61,6% 
Source: Yamamoto/Lambert 1994.
Dmoch/06/12/14/Page 7 
Relevance of industrial Brands 
59% 
54% 
57% 
76% 
47% 
37% 
44% 
50% 
Relevance today Relevance in 5 years 
Mechanical 
Engineering 
Electrical 
Engineering 
Chemicals 
Industry 
Automotive 
Supplier 
Source: Baumgarth, 2010
Dmoch/06/12/14/Page 8 
Brand Strength 
Brand controlling 
Diagnosis and therapy 
Brand strength 
Brand equity 
Evaluation 
Why is the brand strong or weak? 
Which measures are useful to 
raise brand value? 
 How much a brand is worth?
Dmoch/06/12/14/Page 9 
Rose tattoo Candle-light dinner 
Freixenet 
erotic advertising 
beautiful woman 
erotic 
seductive 
fiery 
full of spirits 
Spanish 
passionate 
exclusive 
precious 
golden letters 
fashionable 
frosted bottle 
golden label 
Rüttgers 
cheap 
typical bottle 
red label 
German origin 
Brand Strength 
sparkling 
wine 
Prosecco 
Champagne 
exclusive 
tangy 
sparkling 
good taste tingly 
stimulatory inspiring 
Champagne 
glass 
romantic 
festive occasion 
joy 
Festivity 
Party 
celebrate
Dmoch/06/12/14/Page 10 
Imagery Measurement 
The picture I imagine is 
as clear and vivid as in reality 
clear and quite vivid 
moderately clear and vivid 
vague and hazy 
I don‘t have any mental image. 
Please 
tick
Dmoch/06/12/14/Page 11 
Imagery Measurement 
The picture I imagine is like 
Please 
tick
Dmoch/06/12/14/Page 12 
DEFINITION METHODS OF BRAND STRENGTH MEASUREMENT APPLICATION 
Methods of Brand Strength Measurement
Dmoch/06/12/14/Page 13 
Specific Requirements in B-to-B sector 
No expensive market research 
Benchmarking with industrial goods 
Brand image is primarily people 
driven, not by mass communication 
Popularity of the model 
– to overcome scepticism of sales 
people 
– to convince brand unaware top 
management
Dmoch/06/12/14/Page 14 
GfK Brand Simulator 
Period t-1 Period t 
Marketing Mix 
 Product 
 Price 
 Promotion 
 Place 
Only for FMCG 
 Panel data are hardly available in B-to-B context. 
No explanation why brand strength is high or low 
No suggestion which measures are useful to raise brand strength 
No assessment of visual part of brand knowledge 
Competitors 
Brand strength 
Market 
share 
Marketing Mix 
 Product 
 Price 
 Promotion 
 Place 
Competitors 
Brand strength 
Market 
share
Dmoch/06/12/14/Page 15 
Y&R Brand Asset Valuator 
Brand Asset 
Valuator 
Brand strength 
 Clear and simple 
 Only a rough estimate 
 Variables not sufficiently operationalised 
 No assessment of visual part of brand knowledge 
Differentiation Relevance 
Brand’s growth potential 
Brand stature 
Esteem Knowledge 
Brand’s current power
Dmoch/06/12/14/Page 16 
GfK Brand Potential Index 
Brand 
Awareness 
Perceived quality 
Price 
premium 
Brand Uniqueness 
sympathy 
Brand 
recommendation 
Identification 
with the brand 
Brand 
Confidence 
Brand 
loyalty 
Purchase 
intention 
Brand 
Potential 
Index
Dmoch/06/12/14/Page 17 
GfK Brand Potential Index 
Brand 
awareness 
 Simple and pragmatic 
 Applicable in B2B 
 Benchmarking possible 
 BPI and FCB not independent 
 BPI items are interdependent 
 No assessment of visual part of brand knowledge 
Perceived quality 
Price 
premium 
Uniqueness 
Brand 
recommendation 
Identification 
with the brand 
Brand 
loyalty 
Purchase 
intention 
Brand 
sympathy 
Brand 
confidence 
Brand 
Potential 
Index
Dmoch/06/12/14/Page 18 
Icon Iceberg Model
Dmoch/06/12/14/Page 19 
Icon Iceberg Model 
Brand imagery 
Brand credit 
 Aided brand awareness 
 Perceived advertising pressure 
 Memorability of advertising 
 Brand uniqueness 
 Vividness of brand imagery 
 Appeal 
 Brand likeability 
 Brand confidence 
 Brand loyalty 
Marketing activities 
Short term 
Long term 
Sales 
Webpage 
Advertisement 
Product design 
TV-Spot
Dmoch/06/12/14/Page 20 
Icon Iceberg Model 
 Aided brand Awareness 
 Perceived advertising 
pressure 
 Memorability of advertising 
 Brand uniqueness 
 Vividness of brand imagery 
 Appeal 
 Brand likeability 
 Brand Confidence 
 Brand loyality 
Norm 
22 
21 
8 
2 
-5 
87 
27 
65 
37 
38 
53 
38 
31 
12 
Brand Imagery 
Brand Credit 
-9 
16 
20 
12
Dmoch/06/12/14/Page 21 
 Aided brand Awareness 
 Perceived advertising 
pressure 
 Memorability of advertising 
 Brand uniqueness 
 Vividness of brand imagery 
 Appeal 
 Brand likeability 
 Brand Confidence 
 Brand loyality 
Brand Imagery 
Brand Credit 
Icon Iceberg Model 
Norm 
87 
27 
65 
37 
38 
53 
38 
31 
12 
Brand Imagery 
Brand Credit 
22 
21 
8 
2 
-9 
-5 
16 
20 
12
Dmoch/06/12/14/Page 22 
Icon Iceberg Model 
Norm 
87 
27 
65 
37 
38 
53 
38 
31 
12 
Brand Credit Brand Imagery 
 Aided brand Awareness 
 Perceived advertising 
pressure 
 Memorability of advertising 
 Brand uniqueness 
 Vividness of brand imagery 
 Appeal 
 Brand likeability 
 Brand Confidence 
 Brand loyalty 
Product range Logo 
Branding Sales 
Corporate Design Price 
Internet Product design 
Advertisement Public relations 
User Customer service 
22 
21 
8 
2 
-9 
-5 
16 
20 
12
Dmoch/06/12/14/Page 23 
Icon Iceberg Model 
Norm 
87 
27 
65 
37 
38 
53 
38 
31 
12 
Brand credit Brand imagery 
 Aided brand Awareness 
 Perceived advertising 
pressure 
 Memorability of advertising 
 Brand uniqueness 
 Vividness of brand imagery 
 Appeal 
 Brand likeability 
 Brand Confidence 
 Brand loyalty 
Product range 
Logo 
Branding Sales 
Corporate Design 
Internet Product design 
Advertisement Public relations 
Customer service 
User 
Price 
22 
21 
8 
2 
-9 
-5 
16 
20 
12
Dmoch/06/12/14/Page 24 
Icon Iceberg Model 
Norm 
87 
37 
38 
53 
38 
31 
12 
Brand Credit Brand Imagery 
 Aided brand Awareness 
 Brand uniqueness 
 Vividness of brand imagery 
 Appeal 
 Brand likeability 
 Brand Confidence 
 Brand loyalty 
Product range 
Logo 
Branding Sales 
Corporate Design 
Internet Product design 
Advertisement Public relations 
Customer service 
User 
Price 
22 
8 
2 
-5 
16 
20 
12
Dmoch/06/12/14/Page 25 
Icon Iceberg Model 
Norm 
Brand Credit Brand Imagery 
 Aided brand Awareness 
 Contact frequency 
 Brand uniqueness 
 Vividness of brand imagery 
 Appeal 
 Brand likeability 
 Brand Confidence 
 Brand loyalty 
10 
87 
66 
37 
38 
53 
38 
31 
12 
22 
8 
2 
-5 
16 
20 
12 
Product range 
Logo 
Branding Sales 
Corporate Design 
Internet Product design 
Advertisement Public relations 
Customer service 
User 
Price
Dmoch/06/12/14/Page 26 
Icon Iceberg Model 
Norm 
Brand Credit Brand Imagery 
 Contact frequency 
 Supplier uniqueness 
 Vividness of Supplier imagery 
 Appeal 
 Supplier likeability 
 Confidence to supplier 
 Loyalty to supplier 
10 
8 
2 
-5 
16 
20 
12 
66 
37 
38 
53 
38 
31 
12 
Product range 
Logo 
Branding Sales 
Corporate Design 
Internet Product design 
Advertisement Public relations 
Customer service 
User 
Price 
 Theory based concept 
 Repeatedly validated model 
 Adapted and validated for B2B 
 Imagery taken into account 
 Simple operationalisation 
 Widely known and acepted in practice 
 Brand imagery and brand credit are not independant
Dmoch/06/12/14/Page 27 
Icon Iceberg Model 
Norm 
87 
27 
65 
37 
38 
53 
38 
31 
12 
Brand credit Brand imagery 
 Aided brand Awareness 
 Perceived advertising 
pressure 
 Memorability of advertising 
 Brand uniqueness 
 Vividness of brand imagery 
 Appeal 
 Brand likeability 
 Brand Confidence 
 Brand loyalty 
Product range 
Logo 
Branding Sales 
Corporate Design 
Internet Product design 
Advertisement Public relations 
Customer service 
User 
Price 
22 
21 
8 
2 
-9 
-5 
16 
20 
12
Dmoch/06/12/14/Page 28 
Definitions Methods of brand strength measurement Application 
Application
Dmoch/06/12/14/Page 29 
Heidelberg: Heterogeneous communication
Dmoch/06/12/14/Page 30 
Umbrella Branding 
Umbrella brand with 
subbrands with own 
logo 
Communication clutter 
Umbrella brand 
2000 2008
Dmoch/06/12/14/Page 31 
Heidelberg printing machines 
Brand Status Brand definition Execution 
 Product Design 
 Product Branding 
 Core competences 
Product 
 Corporate Behaviour 
 Corporate Fashion 
Employees  Training 
 Corporate Identity 
 Corporate Design 
 Corporate 
Architecture 
 Events 
Communication
Dmoch/06/12/14/Page 32 
Heidelberg Brand Strength Development 
HD-Customers 
HD-Customers 
Reference value of technical durables B2B 
Brand imagery 
Reference value 
of technical 
durables B2B 
Brand credit 
1999 
2006 
 Market leader 
 Customers Willingness to pay Premium Prices 
 Better financial Rating for Customers ready to buy HEIDELBERG 
 Superior Resale Value 
 High Demand for used HEIDELBERG Printing Machines
Dmoch/06/12/14/Page 33 
Industrial buying behaviour is more formalised 
as in B-to-C 
Industrial buyers are however susceptible to 
strong brands 
Brand strength = psychological value 
–Diagnosis: Why is the brand strong or weak 
–Therapy: Which measures can raise brand 
value? 
Iceberg model is the most suited 
measurement tool 
– Adapted and validated 
–Taking imagery effects into account

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Measurement brand strength industrial goods 20110120

  • 1. Thomas Dmoch Measurement of Brand Strength of industrial Goods
  • 2. Dmoch/06/12/14/Page 2 Table of content Definitions – industrial goods – brand strength Methods of brand strength measurement Application
  • 3. Dmoch/06/12/14/Page 3 DEFINITIONS METHODS OF BRAND STRENGHT MEASUREMENT APPLICATION Definitions
  • 4. Dmoch/06/12/14/Page 4 Industrial Goods Objects of branding Industrial goods Consumer goods Industrial durables Expandable goods Component parts Not component Raw materials Auxiliary materials Ingredient parts Destination Consumption Integration Manufacturing level
  • 5. Dmoch/06/12/14/Page 5 Industrial buying behaviour Customers are organisations – Formalised decision making – Buying Centre –Demand depends on downstream markets Specific solutions found in interactive process Market transparency Long-time relationships Misunderstandings –Always highly involved –Rational and calculative –Not susceptible to emotions –Don’t care about brand names
  • 6. Dmoch/06/12/14/Page 6 Subjectivity in industrial buying behaviour Test with industrial buyers Select the best industrial product Different products, thereof 2 with – Equivalent functionality – Equivalent quality – Equivalent price – But: one with standard design, one with appealing design Result: First choice for 61,6% Source: Yamamoto/Lambert 1994.
  • 7. Dmoch/06/12/14/Page 7 Relevance of industrial Brands 59% 54% 57% 76% 47% 37% 44% 50% Relevance today Relevance in 5 years Mechanical Engineering Electrical Engineering Chemicals Industry Automotive Supplier Source: Baumgarth, 2010
  • 8. Dmoch/06/12/14/Page 8 Brand Strength Brand controlling Diagnosis and therapy Brand strength Brand equity Evaluation Why is the brand strong or weak? Which measures are useful to raise brand value?  How much a brand is worth?
  • 9. Dmoch/06/12/14/Page 9 Rose tattoo Candle-light dinner Freixenet erotic advertising beautiful woman erotic seductive fiery full of spirits Spanish passionate exclusive precious golden letters fashionable frosted bottle golden label Rüttgers cheap typical bottle red label German origin Brand Strength sparkling wine Prosecco Champagne exclusive tangy sparkling good taste tingly stimulatory inspiring Champagne glass romantic festive occasion joy Festivity Party celebrate
  • 10. Dmoch/06/12/14/Page 10 Imagery Measurement The picture I imagine is as clear and vivid as in reality clear and quite vivid moderately clear and vivid vague and hazy I don‘t have any mental image. Please tick
  • 11. Dmoch/06/12/14/Page 11 Imagery Measurement The picture I imagine is like Please tick
  • 12. Dmoch/06/12/14/Page 12 DEFINITION METHODS OF BRAND STRENGTH MEASUREMENT APPLICATION Methods of Brand Strength Measurement
  • 13. Dmoch/06/12/14/Page 13 Specific Requirements in B-to-B sector No expensive market research Benchmarking with industrial goods Brand image is primarily people driven, not by mass communication Popularity of the model – to overcome scepticism of sales people – to convince brand unaware top management
  • 14. Dmoch/06/12/14/Page 14 GfK Brand Simulator Period t-1 Period t Marketing Mix  Product  Price  Promotion  Place Only for FMCG  Panel data are hardly available in B-to-B context. No explanation why brand strength is high or low No suggestion which measures are useful to raise brand strength No assessment of visual part of brand knowledge Competitors Brand strength Market share Marketing Mix  Product  Price  Promotion  Place Competitors Brand strength Market share
  • 15. Dmoch/06/12/14/Page 15 Y&R Brand Asset Valuator Brand Asset Valuator Brand strength  Clear and simple  Only a rough estimate  Variables not sufficiently operationalised  No assessment of visual part of brand knowledge Differentiation Relevance Brand’s growth potential Brand stature Esteem Knowledge Brand’s current power
  • 16. Dmoch/06/12/14/Page 16 GfK Brand Potential Index Brand Awareness Perceived quality Price premium Brand Uniqueness sympathy Brand recommendation Identification with the brand Brand Confidence Brand loyalty Purchase intention Brand Potential Index
  • 17. Dmoch/06/12/14/Page 17 GfK Brand Potential Index Brand awareness  Simple and pragmatic  Applicable in B2B  Benchmarking possible  BPI and FCB not independent  BPI items are interdependent  No assessment of visual part of brand knowledge Perceived quality Price premium Uniqueness Brand recommendation Identification with the brand Brand loyalty Purchase intention Brand sympathy Brand confidence Brand Potential Index
  • 19. Dmoch/06/12/14/Page 19 Icon Iceberg Model Brand imagery Brand credit  Aided brand awareness  Perceived advertising pressure  Memorability of advertising  Brand uniqueness  Vividness of brand imagery  Appeal  Brand likeability  Brand confidence  Brand loyalty Marketing activities Short term Long term Sales Webpage Advertisement Product design TV-Spot
  • 20. Dmoch/06/12/14/Page 20 Icon Iceberg Model  Aided brand Awareness  Perceived advertising pressure  Memorability of advertising  Brand uniqueness  Vividness of brand imagery  Appeal  Brand likeability  Brand Confidence  Brand loyality Norm 22 21 8 2 -5 87 27 65 37 38 53 38 31 12 Brand Imagery Brand Credit -9 16 20 12
  • 21. Dmoch/06/12/14/Page 21  Aided brand Awareness  Perceived advertising pressure  Memorability of advertising  Brand uniqueness  Vividness of brand imagery  Appeal  Brand likeability  Brand Confidence  Brand loyality Brand Imagery Brand Credit Icon Iceberg Model Norm 87 27 65 37 38 53 38 31 12 Brand Imagery Brand Credit 22 21 8 2 -9 -5 16 20 12
  • 22. Dmoch/06/12/14/Page 22 Icon Iceberg Model Norm 87 27 65 37 38 53 38 31 12 Brand Credit Brand Imagery  Aided brand Awareness  Perceived advertising pressure  Memorability of advertising  Brand uniqueness  Vividness of brand imagery  Appeal  Brand likeability  Brand Confidence  Brand loyalty Product range Logo Branding Sales Corporate Design Price Internet Product design Advertisement Public relations User Customer service 22 21 8 2 -9 -5 16 20 12
  • 23. Dmoch/06/12/14/Page 23 Icon Iceberg Model Norm 87 27 65 37 38 53 38 31 12 Brand credit Brand imagery  Aided brand Awareness  Perceived advertising pressure  Memorability of advertising  Brand uniqueness  Vividness of brand imagery  Appeal  Brand likeability  Brand Confidence  Brand loyalty Product range Logo Branding Sales Corporate Design Internet Product design Advertisement Public relations Customer service User Price 22 21 8 2 -9 -5 16 20 12
  • 24. Dmoch/06/12/14/Page 24 Icon Iceberg Model Norm 87 37 38 53 38 31 12 Brand Credit Brand Imagery  Aided brand Awareness  Brand uniqueness  Vividness of brand imagery  Appeal  Brand likeability  Brand Confidence  Brand loyalty Product range Logo Branding Sales Corporate Design Internet Product design Advertisement Public relations Customer service User Price 22 8 2 -5 16 20 12
  • 25. Dmoch/06/12/14/Page 25 Icon Iceberg Model Norm Brand Credit Brand Imagery  Aided brand Awareness  Contact frequency  Brand uniqueness  Vividness of brand imagery  Appeal  Brand likeability  Brand Confidence  Brand loyalty 10 87 66 37 38 53 38 31 12 22 8 2 -5 16 20 12 Product range Logo Branding Sales Corporate Design Internet Product design Advertisement Public relations Customer service User Price
  • 26. Dmoch/06/12/14/Page 26 Icon Iceberg Model Norm Brand Credit Brand Imagery  Contact frequency  Supplier uniqueness  Vividness of Supplier imagery  Appeal  Supplier likeability  Confidence to supplier  Loyalty to supplier 10 8 2 -5 16 20 12 66 37 38 53 38 31 12 Product range Logo Branding Sales Corporate Design Internet Product design Advertisement Public relations Customer service User Price  Theory based concept  Repeatedly validated model  Adapted and validated for B2B  Imagery taken into account  Simple operationalisation  Widely known and acepted in practice  Brand imagery and brand credit are not independant
  • 27. Dmoch/06/12/14/Page 27 Icon Iceberg Model Norm 87 27 65 37 38 53 38 31 12 Brand credit Brand imagery  Aided brand Awareness  Perceived advertising pressure  Memorability of advertising  Brand uniqueness  Vividness of brand imagery  Appeal  Brand likeability  Brand Confidence  Brand loyalty Product range Logo Branding Sales Corporate Design Internet Product design Advertisement Public relations Customer service User Price 22 21 8 2 -9 -5 16 20 12
  • 28. Dmoch/06/12/14/Page 28 Definitions Methods of brand strength measurement Application Application
  • 29. Dmoch/06/12/14/Page 29 Heidelberg: Heterogeneous communication
  • 30. Dmoch/06/12/14/Page 30 Umbrella Branding Umbrella brand with subbrands with own logo Communication clutter Umbrella brand 2000 2008
  • 31. Dmoch/06/12/14/Page 31 Heidelberg printing machines Brand Status Brand definition Execution  Product Design  Product Branding  Core competences Product  Corporate Behaviour  Corporate Fashion Employees  Training  Corporate Identity  Corporate Design  Corporate Architecture  Events Communication
  • 32. Dmoch/06/12/14/Page 32 Heidelberg Brand Strength Development HD-Customers HD-Customers Reference value of technical durables B2B Brand imagery Reference value of technical durables B2B Brand credit 1999 2006  Market leader  Customers Willingness to pay Premium Prices  Better financial Rating for Customers ready to buy HEIDELBERG  Superior Resale Value  High Demand for used HEIDELBERG Printing Machines
  • 33. Dmoch/06/12/14/Page 33 Industrial buying behaviour is more formalised as in B-to-C Industrial buyers are however susceptible to strong brands Brand strength = psychological value –Diagnosis: Why is the brand strong or weak –Therapy: Which measures can raise brand value? Iceberg model is the most suited measurement tool – Adapted and validated –Taking imagery effects into account

Editor's Notes

  1. Good afternoon, ladies and gentlemen, I am pleased to talk about the measurement of brand strength of industrial goods. May I give you an overview which topics I am going to address today.
  2. First, I will define what one understands by industrial goods. I will explain why branding for industrial goods becomes more and more important. Then, I will define the term brand strength. After that it comes to four market research tools for measuring brand strength. I will describe these methods in the B-2-B-context which is quite different from consumer marketing. Above all, it makes the adaptation of these methods necessary. I will finish my lecture with an example which shows how research results entered in building a strong B-to-B-brand. If there are any questions please interrupt me.
  3. We will start with defining industrial goods and brand strength.
  4. A capital good, also called industrial good, is a means of production. Capital goods are used in the production of other goods or services. According to the criterion “destination”, capital goods differ from consumer goods in the fact that the latter are directly purchased by consumers for personal or household use. Furthermore, depending on the consumption or non-consumption of the good one can distinguish industrial durables from expandable goods. An industrial durable is f.ex. an assembly line. An example for an expandable good is a pencil used in the office. In the next step, integration in other products makes the differences. Expandable goods can be distinguished in component parts and Non-component parts. A component f.ex. is the powertrain. A non component part is a f.ex. a tool which helps to fix the power train. Finally, depending on the manufacturing level, we have within the class of component parts raw materials like oil, auxiliary parts like screws and bolts, and ingredient parts, f.ex. an electronic engine control unit. As you can see, in the B-to-B context, we have very heterogeneous products.
  5. Industrial buying behaviour differs from final customers buying behaviour. The customers of industrial products are in most cases organisations. Differences exist in terms of the process leading to buying decisions. In companies decision making is formalised. Many people are involved, e.g. form the purchasing department and operating department. They act in a buying centre. Demand often depends on downstream markets, e.g. if an engineering company constructs a solar power plant in the desert specific parts and services are required. Because of these specific requirements, there are often only few suppliers and market transparency is high. Industrial buyers know the usual suppliers and have sometimes long-time relationships. Actually, industrial buying is people business. However, there are some misunderstandings concerning industrial buyers. The traditional wisdom says that industrial buyers are more rationally concerned with determinants like product performance, quality, delivery, service and price than end consumers. The are not susceptible to emotions and don’t care about brands. But: industrial workplaces comprise ordinary people who are no different from anyone else in how they make judgments, suffer from work load, have arguments, try to simplify their life, fall in love or dislike people and things. Subjectivity is as much a factor in business-to-business decisions as it is in the consumer-facing world.
  6. Actually, there is a lot of subjectivity in industrial buying behaviour as an simple test realized by Yamamoto and Lambert in 1994 shows. They tested the decision making of purchasers for dispense pumps, multimeters, gear motors, valves, DC motors, oscilloscopes and a stepper motor controller. The task was to select the best product in terms of price, technical performance and appearance. In this context, the industrial buyers received written descriptions of products. Most of them were absolutely equivalent in terms of price and performance, but differed in their design. Results are that the attractive products in most cases outperformed the less attractive. For 61,6% of the decisions to make the more attractive product was the first choice. This research provides evidence that pleasing product design has an impact on product evaluation. We have to accept that business decision makers are also humans with human emotions. The emotional character of a product plays some role.
  7. Branding can no longer be considered the exclusive domain of consumer marketing. For example Doka, who is a manufacturer of formworks for construction sites. They changed their very rational advertising approach to a emotional one. They dropped rational arguments and emphasised the brand as you can see in the advertisement on the left. One of the reasons for the important role of industrial branding is the commoditization of many industrial products. Offes become exchangeable. The brand makes the difference. Therefore, in many other industrial branches managers focus on the brand. According, to a recent inquiry of Baumgarth, the brand will even be more relevant within the next 5 years. Of course, the brand is far away to become a decisive factor in industrial buying. However, conditions are said to exist under which industrial buyers appear to make a purchase decision on the basis of the brand instead of price or other factors. This may occur when When product failure would have negative consequences for the buyer’s company or for the buyer personally - when the product requires substantial service or support; - when the product is complex; or - when the buyer is under time constraints.
  8. The brand is an specific image of a product, a supplier or a service which is anchored in the mind of the consumer and which is a result of perceived performance. Brand controlling examines the brand’s contribution to the company’s success. According to a study of Richter in 2007, brand controlling has a significant influence on the company’s success in terms of brand loyalty. There are many methods to measure the success of a brand. Unfortunately, there is a mess with regard to the definition of brand success in literature. There are notions like brand power, brand strength, brand value and brand equity. They have sometimes similar, sometimes different meaning. However, one can summarize two basic approaches: the assessment of brand strength and of brand equity. The focus of Brand equity is on evaluating the monetary value, so from a financial and economic perspective. By brand equity, one understands the monetary quantification of the brand’s use for the brand owner. It answers the question: How much a brand is worth? This is important for purchasing of brand rights, the financial assessment of the company, for calculating licensing fees or the franchise value. The term brand strength concerns the psychological value of the brand. The measurement of the brand strength has two functions: Diagnosis: Why is the brand strong or weak? Therapy: Which measures are to be taken to raise the brand value?
  9. I said before that a brand is anchored in the mind of the consumer and is the result of perceived performance. One way to illustrate the image of brand consumers have in mind is the display of the mental associations. This can be done by drawing associative networks. These networks the properties of a brand and the relations between these properties. It is said that those properties close to each other are also near in mind. The starting point of such a network is a very general and basis representation of a product category. It reflects the general and unchanging properties of a product which are valid for all brands of the category. For example, the product category “sparkling wine” is generally represented in mind by properties like “sparkling”, “typical bottle”, “festive occasion”. A specific brand bears all these properties, but adds some specific items. For example, Rüttgers Club is a sparkling wine which bears all the properties of the product category like sparkling, typical bottle, festive occasions and so on. However, the brand Rüttgers club is also represented by additional properties like “German origin”, “red label” and – unfortunately “cheap”. The more additional properties a brand evokes in the mind of the consumer the stronger is the brand. If these mental brand associations are unique compared to others the brand has a strong positioning. This is the case for Freixenet. In this context, visual associations are of particular importance. This is one finding of Imagery Research. Imagery Research deals with the origin, the storage and behavioural effect of mental images in the human mind. By mental images, one understands those images which are visible in absence of the real object. According to Imagery Research the left hemisphere of the human brain is steering the logical and analytic thinking. The right hemisphere is the picture brain. It works rather comprehensively and follows a visual grammar. The visual brain is more powerful than the abstract brain. Therefore, it makes sense to distinguish between abstract information and visual information. An important finding of Imagery Research is that mental images strongly influence buying behaviour. According to the dual coding theory, if information addressing both hemispheres are better memorized. Therefore, it make sense to communicate the brand's use, values and advantages not only in words but also in concrete, visual or other sensory information. This leads to clear and vivid mental images. The clearer a mental image of the brand is, the more it influences buying behaviour.
  10. According to imagery research, the vividness of the mental image is a key factor of brand image. It has a strong impact on buying behaviour. May I show you how one can measure the vividness of a mental image. This is the Marks-scale which is verbal instrument. After the instruction to think of the mental image of an object, f.ex. a brand, people are asked to describe the quality of this image by these items. Given that mental images are processes in the “picture” brain it seems more suitable to access them directly in the same modality and not via the left hemisphere. Verbalisation is not necessary and transfer losses from language to image are avoided. Therefore, picture scales are more adapted to the assessment of mental images.
  11. This is the picture scale for the assessment of mental images validated by Ruge (1988).
  12. How can we assess brand strength? Let’s talk about market research methods for brand strength measurement.
  13. First of all, there are no B-2-B specific models for the measurement. So one has to adapt the existing consumer driven models taking into account the specific requirements of the B-to-B area. These requirements are: Traditionally marketing budgets are smaller in B-2-B that in consumer markets. So expensive primary research is to avoid. Standard tools are welcome. Second, a benchmarking with industrial goods should be possible. Third, as I said B-2-B is people business, not mass communication as in consumer business. In B-2-B, Customer and supplier often interact directly and frequently. So brand image is more driven by people than by exhaustive advertising campaigns. Brand strength assessment has to take into account this brand driver. Last not least, the popularity of the model helps to establish brand measurement in the company. By tradition, B-to-B-Managers are not familiar with brand management. B-to-B is often driven by salesmen and engineers. A commonly agreed method helps to overcome scepticism.
  14. The brand simulator is a model developed by the market research company GfK. It‘s focus is on the economic assessment of the brand. So it’s more a brand equity model. According to this model, the brand value can be determined by comparing costs and revenues. It is based on a consumer panel. The model assumes that market share depends on short notice on the companies marketing mix in the context of competitors’ activities. The effect which cannot be explained by the marketing mix is supposed to be caused by brand strength. Brand strength is a residual value. By comparing several periods, one can recognise how brand value is changing which delivers an evaluation of relative brand value. The brand value results from the difference between yield (share of the market) and costs for the marketing mix. Critiques are: It’s a tool for FMCG In B-to-B context, Panel data are rarely available. No explanation why brand strength is high or low No suggestion which measures are useful to raise brand strength No assessment of visual part of brand knowledge
  15. The BrandAsset Valuator is a database created by the advertising agency Young & Rubicam. This data base consists in consumer perceptions of brands. The Brand asset Valuator measures the value of a brand along four dimensions: "Differentiation," "Relevance,“ "Esteem” and "Knowledge." Differentiation and Relevance build up to "Brand Strength. "Esteem” and “Knowledge” are used to calculate "Brand Stature." The Brand asset Valuator defines these terms as follows. "Differentiation" quantifies the brand's point of difference. "Relevance" how appropriate the brand is to you. "Esteem" how well regarded the brand is. "Knowledge" an intimate understanding of the brand. "Brand Strength" describes the brand's growth potential. "Brand Stature" describes the brand's current power. BAV's database is based on data on 30,000 brands across 400,000 consumers in 48 countries through 240 studies. Critiques are: Clear and simple Only a rough estimate Variables not sufficiently operationalised No assessment of visual part of brand knowledge
  16. The next tool is the Brand Potential Index. Brand strength is operationalised by 9 variables: Brand loyalty, purchase intention, brand awareness, premium price acceptance, uniqueness, brand sympathy, brand trust, brand identification, Brand recommendation. These variables are theoretically founded on consumer research an validated for many branches and product. Reliability is high. There is also evidence that BPI can forecast market share and the proportion of first choice buyers. First-Choice-Buyer = a customers who ranks a brand top on his shopping list and buys the product. On the basis of this model, a brand strength can be condensed into one single value.
  17. But this compilation to one single value is a problem because BPI-variables are not independent: Brand awareness and brand confidence influence brand sympathy. Brand sympathy influences brand loyalty. Brand loyalty has influence on readiness to pay a price premium and on brand recommendation. Therefore, Pros and cons are: BPI variables are interdependent. BPI and FCB not independent. They partially have the same variables: brand loyalty and purchase intention No assessment of visual part of brand knowledge Simple and pragmatic Applicable in B2B Benchmarking possible
  18. The iceberg model has been developed by the market research institute ICON Added Value. It’s a behavioral-science model to measure brand strength. The model is based on an analogy from psychological personality research. According to Sigmund FREUD one can describe human personality by analogy with an iceberg by a visible part and an invisible part. The latter is bigger than the first. The invisible part lies under the surface and is marked by the past experiences.
  19. As in personality research one can describe brands by a visible part and an invisible part, the variable image and the substance: We distinguish between: Brand image: How does the customer currently perceive the brand? Brand credit: This shows rather long-term changes of customer settings Both factors form the brand strength. The brand picture consists of the following variables: Aided brand Awareness, perceived advertising pressure, memorability of advertising, uniqueness of the brand, vividness of the brand, brand appeal. brand credit is measured by brand sympathy, brand trust and brand loyalty. In the iceberg model imagery effects of marketing are taken into account by “brand vividness”. In a short term perspective, the brand image is marked by marketing activities. In contrast, brand credit can only be changed on the long run and in an indirect way. It is by an unique, clear and attractive brand image. Both factors have a proven effect on sales.
  20. Brand image and brand credit are measured via the variables on the right..
  21. Brand Image and brand credit can be compared to branch or product specific benchmarks.
  22. Mental images are the result of the whole range of marketing activities. That means product, packaging, Corporate design, Product design, and not only by the advertisement as in B-to-C-markets. The Iceberg model is suited the B-to-B context, where advertising doesn’t plays an important role.
  23. Empirical evidence shows that in B-to-B-context brand strength is mostly determined by physical product attributes, employees and by customer service attributes.
  24. Because mass communication is less important as in B-to-C markets the advertising related items are eliminated in a B-to-B adapted version of the Iceberg Model.
  25. A favourable impression of the sales man will much more than advertising help the company to create a strong brand. Apparently industrial buyers associate the service they receive with the company. Therefore in this especially for small B-to-B markets adapted version of the Iceberg Model the item “perceived advertising pressure” is replaced by contact frequency of the sales staff.
  26. If the research is realized among a sample of existing industrial clients, one can even remove the item “aided brand awareness”. Moreover, the notion “brand” is replaced by “supplier” because in B-to-B area it might be irritating for managers not familiar with brand management. Reliability of this adapted model has been confirmed by Benckebanck in 2006. Pros and Cons are: Theory based concept Repeatedly validated model Adapted and validated for B2B Imagery taken into account Simple operationalisation Widely known and acepted in practice Brand imagery and brand credit are not independant
  27. How can we apply the findings from the Iceberg Model into practice? Let me give you an example of Heidelberger printing machines. The figures of this iceberg display the status of the Heidelberg brand in the early nineties. As you can see Brand credit is good but brand imagery is low due to bad figures in vividness and uniqueness. Let me explain you why and what Heidelberg successfully has done to improve this figures.
  28. In the late 80ies, the situation of Heidelberger Printing machines was characterises by very heterogeneous communication. There was a clutter of different advertising campaigns by the different business units of Heidelberg. Here we have some advertisement which appeared in the same time and even in the same magazine.
  29. In order to solve this problem, marketing people at Heidelberger Printing machines first structured the different products and services and created a strong corporate design. Thus, they focussed on the corporate brand which serves as umbrella for all products and services.
  30. Because of the importance of personal communication in the B-to-B sector Heidelberg focussed on those situations were the brand became visible to the customer: The product itself, the employee and the direct communication by events and trainings in the headquarters. They focussed on behavioural branding. Therefore, for some months they realized brand workshops and made employees even visit and work at Ritz Carlton in order to adopt a stronger service orientation. These activities were made to make sure that all employees understand the brands character, are involved in the brand and transmit this image in their communication with the customers consistently.
  31. Today the result is that Heidelberg significantly raised their brand strength in terms of brand image and brand credit. They are still market leader instead of heavy competition Customers are ready to pay Premium prices Customers receive a better financial rating by banker when buying Heidelberger products The reason is the superior resale Value There is a high demand for used HEIDELBERG printing Machines
  32. <number> Industrial buying behaviour is more formalised as in B-to-C Industrial buyers are however susceptible to strong brands Brand strength = psychological value, mental image Helps for Diagnosis: Why is the brand strong or weak Helps for Therapy: Which measures can raise brand value? Iceberg model is the most suited measurement tool: Adapted and validated Considering imagery effects and personal communication