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The big b2b brand bamboozler: corporate or product branding?

The big b2b brand bamboozler: corporate or product branding?CEOs of b2b companies have become more savvy to the value of strategic brand building in recent years. Defining and investing in a b2b brand is key to achieving competitive differentiation in the market, not to mention stronger customer loyalty, internal unity, premium price positions and attractive employee brands.  

Strong brands enable b2b organisations to transcend product features and build a more enduring, emotional connection with buyers and other stakeholders, by reflecting some of the values they hold dear. Uncovering what is truly important to your stakeholders is a powerful and transformative process which will enable you to communicate company or product strengths that imbue their desires.

Yet, one of the most important decisions in b2b brand strategy is whether to strive to achieve such connections via your product or corporate brand.

Raise the profile of your b2b corporate umbrella or push product superiority?

Before you make such an important decision, you first need to understand the key types of strategies available, what they entail and why you’d choose them.

There are three main types of brand strategy we see in the market today:

  1. Masterbrand strategy (also known as Branded House or corporate branding)

  2. Product brand strategy (or House of Brands)

  3. Hybrid brand strategy (which contains a mix of both, and where the product brand is endorsed by the company brand)

What do the three key brand strategies look like in practice?

1. Masterbrand strategy 

A masterbrand strategy is where the brand and the corporate name are the same. Using your company’s name as your brand creates an umbrella brand that infers meaning on all of your company’s offerings.

Virgin is an easy-to-spot example. Richard Branson has applied this strategy to effectively communicate the vision and culture of the entire organisation. And it’s fair to say that it helped him create one of the most recognisable and unique brands in the world.  All companies in the Virgin family are associated with the things you’d expect from the brand: genuinely good service, straight-talking products and an adventurous, pioneering spirit.

Master brand strategy
Corporate branding requires a hands-on approach at board level and in particular, by the CEO and senior management of a business, which is why Richard Branson is the consummate champion of his brand. He understands that his leadership is required to ensure the brand is correctly represented through the company’s behaviour and all touch points.

IBM equally knows how to keep its name attached to everything it does. This way, it leverages its values of dedication, trust and innovation. This has led to IBM being named Forbes 7th most valuable brand, despite its recent decline in revenues.

IBM is Forbes 7th most valuable brand

2. Product brand strategy

Product branding is when you use your product’s name as a brand, and is frequently used to differentiate a branded product (or a number of them) from competing offerings. It is also known as a House of Brands strategy.

product brand strategy

Product branding gives great flexibility because it enables a company to easily position itself to appeal to different markets. Procter and Gamble for example, can use this strategy to appeal to the Venus target market, without alienating its Old Spice target market.

Product brand marketing can be managed and led by middle marketing management, as opposed to senior leadership, which makes it a scalable model for large consumer organisations.

Basecamp is a b2b technology company owned by an organisation called 37signals. 37signals stays pretty much under the radar in branding terms. The company has relegated its other products, focusing the majority of its attention on Basecamp - a well-known digital project management tool.

Basecamp - a well-known digital project management tool
3. Hybrid brand strategy

A hybrid brand strategy is, as the name suggests, a kind of middle ground. You’d use the company name as a brand name, but also have one or more products that are associated with the corporate parent brand. This strategy is increasingly adopted by large corporate brands that can leverage their reputation to add credibility to smaller, lesser known brands. Xylo, a foreign exchange subsidiary of Westpac is such an example, as is Courtyard by Marriott.

Why do b2b brands need a different branding approach to b2c?

Interestingly, most consumer product companies opt for the House of Brands strategy or hybrid strategy, using the product as their primary brand. This way, each of the product brands can focus on their specialised market without impacting the other.

Conversely, most b2b organisations deploy corporate branding. Here are a few reasons why.

1. B2b brands have to support more complex buyer journeys

The b2b buying process is more complex than b2c, typically featuring between 4 and 8 buying stages, and usually taking a lot longer to complete (sometimes up to 24 months). There are more people in the buying process - at a minimum, a researcher, multiple influencers, a buyer or approver and several information gatekeepers. Every person who is impacted by the purchase, either personally or professionally, will have a stake in the decision, and some of these decision-makers will be more interested in the ethics, stability and reliability of the vendor than they will in the product itself. A compelling, known corporate brand, can go a long way to developing high levels of trust across the decision-maker mix, or getting a business on the shortlist to begin with, making the job of the salesperson that much easier.

2. Personal interactions matter more in b2b marketing

B2b products and services are usually far more complex than those in the b2c environment. There are fewer customers, larger deal sizes per customer, and more enduring supplier relationships that are essential to the consistent delivery of products and services.

Personal interactions therefore play a huge role in the perception of a b2b brand with buyers evaluating the brand on the basis of such experiences. Investing at the corporate brand level helps to attract culture-fitting employees as well as to help them understand the brand-centric behaviours that will win the hearts and minds of your buyers throughout the relationship.

3. Masterbrands offer simplicity in an otherwise complex b2b environment

A masterbrand or corporate brand strategy offers the most obvious benefits to a b2b business in terms of simplicity. It uses the same methodology and tools as product branding, but has a broader stakeholder audience (media, government and shareholders). This offers an element of simplicity in brand management, because the business manages a single brand, and one that really represents the vision and culture of the organisation.

Despite this array of relationships that need to be managed, and the ethical and social responsibility required, corporate brands can become powerful singular symbols that mean a lot to many audiences, and require less resources to manage than a portfolio of product brands.

However, product brands can be managed by middle marketing management, and if a business wants to protect long-standing brands or enter a new market, a hybrid or product brand strategy may make sense. The question is whether the business can sustain the resources and added complexity to support such a strategy.

4. Masterbrands tend to be more cost effective

Naturally there are lower costs associated with the definition and management of one corporate brand, as opposed to many. Product and hybrid brand strategies can conversely result in high marketing costs.

However, not to be overlooked, a standalone product brand may mitigate financial or legal risk, thus protecting the company’s assets or the reputation of other product brands. It could also pay dividends if the vision for the product brand is to quickly build value and then sell that business.  

5. Give your brand the competitive advantage through enduring differentiation

A masterbrand strategy is very difficult to copy. A company’s vision and culture are virtually impossible to imitate.  Additional to this, there are two main kinds of brand positions: superiority and difference. Corporate branding often focuses on the differentiated aspects, using culture and vision as their beacons.  This is frequently one of the most sustainable advantages a b2b organisation has.

Most product branding focuses on product superiority. However, the rapid speed of innovation in technology makes it very hard to achieve and sustain that kind of product advantage. Thus, differentiation is often fleeting.  

A hybrid strategy unfortunately does little to mitigate the issue of fleeting differentiation, however it could help to sustain some greater customer loyalty, if its corporate values were aligned to those of the customer.

6. Brand power and relevance

With a masterbrand, you can create powerful campaigns that have potentially more impact because they’re speaking about bigger ideas and more aspirational thoughts. This can, in turn, help a business to attract investment and media attention at the masterbrand level. It can also aid in attracting and retaining top talent, and shorten sales cycles thanks to improved customer trust.

Because of the nature of b2b products, and the perceived risk the decision maker takes on in choosing a vendor, b2b markets often require high levels of trust in the parent brand before any kind of sale will be made. This trust can be gained either through a strong corporate or a well-planned hybrid strategy.

A note on agility and speed to market

It could be argued that the less product-specific a business is, the more generic the brand. A corporate brand needs to appeal to a broad range of stakeholders, including media, shareholders and government bodies. A product brand, however can be very targeted and focused on the buyer’s needs only, and can likely adapt to emerging or international markets more quickly. This can result in significant upticks in sales.  

But b2b product brands are often built on the basis of function and performance, so the requirement for adaptation to sell across borders is less than in a consumer market. Buyer needs and trends also change more slowly than in the consumer environment, giving b2b brands more time to adapt messaging or performance accordingly.

Luckily, if we need extra agility, we do have options. When done well, b2b companies can leverage the power of a trusted corporate brand, with the flex of an endorsed product brand. We rarely, however, see a b2b business taking advantage of a pure product brand strategy for the sake of agility and speed to market. It is simply a less pressing requirement for b2b brands.

A final word

Today, most b2b organisations invest in a masterbrand strategy, and you can see why. The benefits in terms of simplicity, the capacity for leverage and trust building are obvious. However, there are some limited circumstances where a hybrid or pure product brand strategy may be required.

While it would be neat to offer a catch-all solution, it turns out that the choice of your b2b brand strategy depends more than anything on two key things:

  1. The vision for your company and the individual services or products that sit underneath your corporate umbrella. Your brand architecture and strategy works in support of your business strategy. So before you choose a brand strategy and architecture, make sure you’re crystal clear on future plans for your business.

  2. The resources and investment you have to put into your branding exercises. Does your company have the headcount, budget and resources to support a portfolio of brands, or one powerful brand?

The most successful brands in the world use the power of archetypes to tap into human psychology, and drive extraordinary results.

FInd out how. Download your copy of Which Archetype is your Brand?  now.

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Brand chemistry is a strategic brand agency. With more than 10 years experience building brands, we know what it takes to stand out amongst your competitors. Take a look at our client case studies to find out more.

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