However, branding is essential, whether for consumer brands or for B2B businesses because it has to do with differentiation – standing out from the crowd. As competition increases in every industry, where competitors can copy processes, products, systems, services, technology and even quality, it is only the brand that carries weight and remains a key differentiator.

In addition to the sustainable differentiation advantage, good branding can also bring exceptional financial results to companies, if created, positioned, developed and managed well. This is easily demonstrated by looking at the market capitalisation of well-branded companies versus relatively unbranded companies across all world stock markets.

In most cases, a large percentage of the market capitalisation of companies is represented by an “intangible” value mainly attributed to the goodwill attached to the respective brand name. Cases in point include Nestle which paid six times the net asset value to buy Rowntree and its spectacular portfolio of brands such as Kit Kat and Smarties; Philip Morries which paid four times the net asset value in its purchase of Kraft Foods, and Ford which paid US$2.4 billion to buy the Jaguar brand.

The sad fact is that few B2B companies realise this. They assume branding initiatives are only applicable to B2C businesses with the consumer as the end user. However, more and more B2B companies are slowly recognising the power that good branding can bring to their businesses especially in view of the constantly evolving marketplace. Concurrently, such businesses have also slowly started to accept that the customer can also be another business and how such customers react to the way products and services are marketed.

The Dynamic Marketplace
One of the more obvious business trends has been the movement away from product-led marketing towards customer-led marketing. This has forced business managers to get closer and listen to the customer. In addition to many new initiatives being introduced in market research, customer service, and quality management, brand and marketing managers are also getting increasingly involved in new product development.

Corporate strategies have also moved away from specific industry growth, to multi-industry and multi-market growth. This has led top management to take a harder look at branding as a holistic activity, focusing on how to project consistent identities and crate consistent images in a variety of different situations.

The breakdown of global market boundaries has meant that more companies are adopting a global focus, and brand management now has to achieve a good balance between global identities and local adaptation. This trend has spawned many strategic alliances involving co-branding to reduce the cost of global expansion. Companies are also exploring tailoring brand offerings specifically to local markets, e.g. Coca-Cola’s “Think Local, Act Local” global strategy.

There has also been a marked change in companies who are concentrating less on product branding and more on corporate branding. Even the masters of product branding, Procter & Gamble (P&G), are now putting much more strategic effort into leveraging their corporate brand name, whilst Unilever is reducing the number of its brands from 1600 to 400 and also putting the corporate brand name into a higher profile.

The reason for this is that, for decades, companies like P&G have been losing out on building the value of the parent brand itself. Since brands are now commonly valued in financial terms, a strong corporate brand helps to increase market capitalisation and subsequently, improve shareholder value.

The rapid rise of the Internet as an information and commercial tool has forced traditional brand companies to establish Internet branding strategies. The virtual world raises additional challenges for management, especially in terms of developing a consistent brand experience. The rules of branding in the virtual world are somewhat different from those that apply in the physical world. Nevertheless, Internet branding and its e-commerce capability are now “must haves”. You may be surprised to note that e-commerce is used much more in B2B industries as compared to the B2C world.