Industrial Branding

Branding is not a gimmick. It is the management of the company’s reputation and critical perceptions, such as its reputation for quality, strength, product positioning, the organization’s buyer-supplier relationships, and the customer’s perception of its “domain of expertise.”

Branding is much more involved in the industrial world than the consumer world because it rests more on the reputation of the company as much as the product it produces. While a company’s reputation for a consumer product does have some influence on the sale of the product, it is even more so for the industrial manufacturer.

The intangible elements of an industrial manufacturer’s brand often matter as much as the tangible characteristics of the product it produces. A study of buyers across various industrial products revealed a relative lack of sensitivity to physical product attributes and a relatively high sensitivity to seller image and other intangible product attributes. Even the perceived amount of advertising investment can serve as a product and company quality cue. This perception supports the strategic importance of maintaining an active presence in advertisements in the trade magazines because it shows the company has the resources to invest in marketing the product.

According to a study from Warwick Business School and the University of Warwick, “Successful brands can be viewed as a quality product surrounded by several layers of product features of increasing intangibility.”… “Intangible factors matter, even in rational and systematic decision making”. The study found most buyers are concerned with the vendor’s psychological or intangible attributes as the physical attributes of the product and concluded that promotional activities should reflect this concern. All of this goes back to creating a level of trust and dependability between the manufacturer and consumer. Intangible brand benefits require excellent marketing skills to manage, and it can be costly to develop and maintain these in a competitive environment. However, these perceptions can provide the key to additional sustainable differentiation to the consumer and support the maintenance of premium prices.

Branding Framework

The industrial branding framework can strengthen segmentation based on benefits. A Brand Framework is constructing your brand (image) based on the most highly prized benefits and services consumers most often seek when purchasing your type of product(s). These include primary brands, namely product attributes and performance characteristics, and greater branding degrees, such as parts availability and support services. For example, within the steel industry, research has identified three distinct segments: a price-sensitive segment, a service segment, and a commitment segment. Brand value to the customer is a function of the expected price and the expected performance of tangible and intangible attributes. A well-planned brand framework limits the temptation to try to be everything to everybody, thus losing any unique positioning and high-value perceptions in the most critical areas.

According to the Warwick Business School, brand value to the customer consists of four performance components: product, distribution (ordering and delivery) services, support services, and company. The buyer determines the weight of each category’s importance.

• Product Performance lies at the value base, centering on the core physical product. Actual product performance is quantifiable by measures such as the number of defects and usable product life.
• Distribution Performance (aspects of ordering, availability, and delivery) are critical decision criteria. Participants highlighted product availability and delivery reliability. For production processes, the risk lies in manufacturing downtime, with its very measurable costs. Supply risk was also a critical factor because many companies have suffered from shortages and delayed shipments in recent years.
• Support Services Performance includes providing services that augment the primary product, such as technical support, training, and financial support. Providing technical support and troubleshooting for products in the field is often essential on an on-going and emergency basis. The availability of hotlines, on-call services, and regular site visits are deemed very valuable to buyers. Training of technical staff upon request was also expected and commonly provided. Technical support is increasingly scheduled earlier in the decision process, with suppliers actively participating in design brainstorming sessions.
• Company Performance covers the company as a whole, not just the particular product, brand, or service. This aspect is an appropriate consideration for manufacturers and distributors. The marketing manager of a leading manufacturer explained this as the customers buying our “message.” He described the “message” as technical experience, a history of innovation, a stable future supply, and worldwide coverage. More intangible associations with a market leader included less risk. The survey often mentioned relationships as an essential factor.

Additional areas of concern for industrial consumers:

• Price: Generally, buyers rate cost as an essential criterion, with some buyers estimating that price accounts for 70% of the final decision. Price was less critical at the early screening stage, and on several occasions buyers stated it is “unprofessional” to put too much weight on price alone. Price was considered more important in replacement or aftermarkets than to original equipment manufacturers.
• Ease of ordering: Ease of ordering was another factor. In some instances, day-to-day ease of ordering at the interpersonal level came down to efficient telephone answering and competent clerical assistance. Ease of ordering in emergencies was also mentioned, with words such as trust and teamwork used. Surveys note differences in the clarity and comprehensiveness of product catalogs.

Develop your Brand

A brand is more than just the tangible product you produce, and the challenges with manufacturing marketing today make it even more important that you develop a strong brand. Contact Red Crow Marketing today to get started on building your industrial branding framework.