Academic Research学术研究连载

走进中国工业品牌管理与竞争的新常态

Entering into the “IB and HB branding management Era”

                               by Dr. Yang XiaoTong

 Edited by Eric and authorized for release

OVERVIEW

Now we are progressing to a new chapter where a theoratical model will be created to better explain why and how a high-quality ingredient brand is crucial to the host brand it gets incorporated into, for maximized branding values to be brought to the host brand.              

3.1 Theoretical Frameworks

According to what we have previously analysed in Section 2 by combining Resource-Based View of The Firm and relevant marketing theories (Srivastava, Fahey & Christensen, 2001), and upon our amendment to the matrix of managerial decision to be taken with branding strategy (See figure 8), we will start modeling this section of our study with a new flowchart as follows,

Remarks: Symbol ”±” denotes what outsourced or self owned; symbol “+” denotes self-owned ingredient brand; symbol “-” denotes outsourced ingredient brand; letters “CS” stands for Customer Satisfaction, letters ”CL” stands for Customer Loyalty.

As our study in this section directs, we are using the analysis framework created collectively by Srivatava, Fahey and Christensen for further development. For many of our domestic equipment manufacturers, especially with those large-and-medium-sized OEM manufacturers, market-based resource input maybe partially motivated by the need under strategic managements for acquiring external resources through Mergers & Acquisitions for independent business development. From the firm-leveled analysis of special marketing resources, brand marketing has been identified as a must for corporate strategic management by those large-and-medium-sized manufacturers. This is because they are always confronting a fact that critical ingredient products are always what draws most attention from customers in competition, which in return pushes them for adopting the business strategy that is modeled OEM host brand±ingredient brand. Meanwhile, to better illustrate our evolved version of this flowchart, we will be doing further analysis of the target path from Market-Based Customer Value Creation to Retention of Customer Value and Competitive Advantage, and finally to Value Appropriation and Financial Performance. By explaining how to make these key steps happen one by one from the angle of marketing strategy, we come to realize that, Quality Orientation along with the model of OEM host brand±self-owned ingredient brand could be a better way of combining the RBV Theory with the Trust-Commitment Relationship Marketing Theory. In retrospect of a large amount of the previous literatures, we found quite limited amount of empirical research was made ever on what we are doing now. It’s well known that, enhanced customer satisfaction and customer loyalty, or equally CS+CL, is a contributing factor to retention of customer value and competitive advantage and can further affect value appropriation and financial performance.However, what is the effect like of the new model of Quality Orientation along with the model of OEM host brand±self-owned ingredient brand on CS+CL? This is still an argument that needs real-life testing, and is considered a primary part of our assumptions in modeling research latter on. Our flowchart also reveals that business strategies that are aimed to give a firm sustained competitive advantages determine how its corporate resources are deployed and utilized. In our views, self-owned ingredient brand functions as a long-lasting element to hold customer value and competitive advantage, which is intrinsically what OEM host brand needs most for sustained business development on market. In this sense, we call it a more advanced type of branding strategy.               

In general cases, all corporate executives are required to choose from different branding strategies either from a short-term view or from a long-term view (Helmig et al., 2008). As indicated in the above figure 8, self-owned ingredient branding strategy is remarkably featured with a long time span and heavy cost of capital investment. Therefore, in order to maintain a long-term competitive advantage, branding strategy acts as a key factor that makes enterprises more inclined to mergers & acquisitions or independent development as an alternative. As far as industrial manufacturing is concerned, those critical ingredient products often follow this way. In this article, we will choose to take some of our large-sized domestic manufacturers of heavy machinery as example.

As a continuing effort to devising an appropriate theoretical framework of applying our study on ingredient brands to B2B market, we will be conducting an empirical research on the correlations between host brand and ingredient brand as revealed by Michael and Norris (1999).

In reference to the above model we just presented, it was already known that ingredient brands are possible to bring brand trust from consumers and that brand trust can positively lead to increased customer satisfaction and customer loyalty. Besides, trust of ingredient brand was also proven to be a primary cause to the gap of quality as perceived from host brand. At the time of determining what context we would put our study into, an overwhelming majority of our large-and-medium sized equipment manufacturers have been turning their attention to rethinking what marketing strategy will assure them to retain sustained competitiveness with their host brands in a long term, given the difficulties in competitions dominated by many ingredient brands which originate from those advanced western countries. Even having many years of experience in manufacturing those critical ingredient components, only a small number of our domestic host brand manufacturers had ever thought of branding their self-owned ingredient products strategically from marketing’s perspective, let alone of implementing a specific strategy to win trust from customers of ingredient brand to boost their competitiveness.

Most of literatures focusing on this subject have taken wide criticism from marketing management circle due to the way they were carried out by student sampling (Petersen, 2001). Moreover, we need to look at the fact that empirical study on Co Branding strategy, including Ingredient Branding, hadn’t been conducted until the year 1995 (Helmig et al., 2008), which is far from enough to justify or reinforce what had been discovered being applicable universally. In this sense, more forceful empirical evidence are necessary for further study and are welcome by marketing researchers (Helmig et al., 2008).

Thank you awaiting our next release…..

For contact with the author, please email to shanshan@towermind.com;

For contact with the editor, please email to yangls@skiplifting.com