I will provide an interesting example case. A company like Intel which mostly sells its processors to the PC or Laptop manufactures is advertising to reach the common public? Why is it needed and what are the disadvantages to it if there are any? I would like the people answering this question to add up and analyse their own examples in regards to B2B company advertising in common public domain.
Hello Sampath,
I want to see it as a brand association to create a positive attitude and reputation for both brands. For example BMW chooses Castrol Edge Motor Oil - Castrol name appears on the filler cap of every new BMW for more than 10 years, BMW even recommends it owner’s manual.
So in reaching out to the public, those who aren't using BMW may consider Castrol, with the idea that its so good and may therefore be suitable.
However the downside may be the benefit to the other party, in this case BMW. Hopefully Castrol can bring more business for BMW.
B2Bs using mass or targeted advertising to the B2C audience may be engaged in strategic efforts to promote reputation/image and brand/shareholder value (GE, IBM, P&G and other house of brands firms) and in some cases stimulate derived demand (Intel, Big Phamas etc). BMW-Castrol is a good example of a targeted effort at derived demand aimed at automotive techs and car and race enthusiasts who lift the car hoods. It probably benefits Castrol in positioning itself as a value-added premium product associated with the high BMW car market. It may give the firm competitive advantage as CastrolEdge is teamed up with other European luxury and high-end car brands, thus discouraging its competitors from entering the same markets. BMW gets a benefit through a strategic partnership with a lubricant specialist that is willing to innovate and design performance lubricants targeted specifically for BMW engines. BMW probably gets pricing breaks as well. For a pilot study on B2B brand management and stock performance see Philip Kotler, Waldemar Pfoertsch, (2007) "Being known or being one of many: the need for brand management for business‐to‐business (B2B) companies", Journal of Business & Industrial Marketing, Vol. 22 Iss: 6, pp.357 - 362. On B2B co-branding supplier-customer benefits see Erevellesa,Sunil et al An analysis of B2B ingredient co-branding relationships, Industrial Marketing Management, Vol. 37, Iss. 8, Nov. 2008, Pages 940–952
Thank You Emmanuel Mogaji and Tom Failla. I liked your Thoughts about the Brand Associations for Brand/Shareholder Value creation. Just to add on it Brands could use that value for getting better employees as it raises the pride of employees to work for an well reputed company. Having said all this we should also consider the cost that B2B companies has to bear for advertising directly to end customer. so the real question comes once when we start thinking if that investment of advertising in through other brand is worth the return? Intel has given huge discounts to the Laptop industry for placing it's logo outside the laptop stating "Intel Inside". in the case of Intel it's valuable as that helped in their sales increase. Say like a metal company which provides metal to produce a car's body can't give huge discount for putting it's logo on the car because for them it's not much relevant. we know that Marketing adds to the service or products value. But for the B2B companies is marketing to end user a "good to have" or "need to have"?
Interesting that you mention steel. Through the years U.S. Steel and other metal companies such as Alcoa, which also has consumer brands such as Reynolds, have marketed themselves to the general consuming public as part of an overall corporate image and reputation strategy. In my experience such advertising, especially for major companies, is a necessity given the breadth and scope of constituencies large firms have (e.g. shareholders, direct and downstream customers, distributors, employees, potential employees, communities, regulators etc.) Consider U.S. Steel's sponsorship of NASCAR race car drivers and, of course, the legendary Pittsburgh Steelers NFL football team that adopted the firm's logo http://www.steelers.com/history/logo-history.html. Sponsorships and advertising are investments in the brand value and overall goodwill of the firm. Just as with physical assets image and goodwill need to be maintained and refreshed through an overall strategic marketing orientation that includes tactical elements such as advertising.
+ Global reputation which is indispensable especially when a company is interested in expanding to B2G business. Such advertising might have a CSR value and enhance a local staff pride.
- In common marketing terms it is a mere waste of resources.
BtoB: managers at B are part of the general public. So they may read your story/offer.
Your story therefore must be clear and checked for comprehension.. It will cost more money to reach your target
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