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 have been progressing to the concluding chapter of this study. In this section, our intent is to give you a sense of how our study as a supplement contributes to the the preceding researches into branding strategy, especially under the context of what we have experienced in China during last a number of decades.                         

6.1 Conclusions and discussions on managerial implications

6.1.1 Theoretical values and innovative thinkings

Theoretically, part of our findings in this article is quite consistent with that from B2C market. In B2B market, ingredient brand serves as a significant contributing factor to improving the perceived host brand quality. More importantly, it will deliver enhanced customer satisfaction and customer loyalty among industrial customers with host brand in between to bridge the gap. This is to some degree a big step forward to make brand research complete with extended application in B2B context. In the mean time, it also proves to be a strong backing to the analysis from other scholars on Co-Branding strategies by bringing in ingredient brand (Rao & Ruekert, 1994; McCarthy and Norris, 1999; Waidyanathan & Aggarwal, 2000; Washburn et al., 2004; etc.). 

Our study here is actually based on a particular spell of the growing industrial economy in China, which partly has explained the intention of many home manufacturers of industrial equipment to create their own competitive advantages under brand marketing, by means of taking advantage of identified resources of ingredient brand. As market competition continues to heat up, more attention of host brand owners has been shifting to ingredient brand which is regarded as a key point to get host machines upgraded, either in quality or in brand image. It makes a lot of sense when the host brand is particularly of moderate quality level in competition. Revolving around those corporate competitive strategies that are resource centered or brand centered, a given firm in practice is facing many ways of identifying and attaining sustainable competitive advantages, but with the focus being put more on extended resources. What reflects this trend most will be the development of those ingredient brands that play a critical part in keeping host machine functioning. Although a number of physical factors, like price and product, is imitable, there are still many things that are extremely hard or even impossible to replicate, featuring a range of intangible assets such as brand, customer relationship and trust etc (R.K. Srivastava et al., 2001). In our point of view, one of those marketing resources that have a most positive influence on host brand is creating and managing self-owned ingredient brand. From the angles of both RBV theories and brand marketing theories, our study is aimed to provide large-and-medium-sized manufacturers of industrial equipment, who are planning or already have been carrying out integration of brand resources, with practical guidance to making brand marketing decisions.

In terms of brand marketing, our study is pioneering specimen analysis on the customers of mining equipment from our home market. In this process, we made a deepened assessment of the marketing influence which ingredient brand, with self-owned ingredient brand included, makes on a string of matters like host brand quality, customer satisfaction and customer loyalty, which goes beyond what we would normally expect from previous research on brand marketing in B2C context. It is considered a very first step forward that has been taken to pave the way for future studies on brand marketing in B2B context.

It is the first time that empirical research has ever been carried out on this subject from an angle of brand-centered theory, presenting innovative ways of practising brand management in marketing of ingredient brand, especially of self-owned ingredient brand. Statistically, ingredient brand marketing is found to be of surprisingly significant meanings to improving host brand quality for our home manufacturers of industrial equipment. This is because ingredient brand is known to be able to make considerable impact on perceived host brand quality, customer satisfaction and customer loyalty. With the perceived host brand quality in particular, such a positive effect could be even more significant. In generic terms, ingredient brand is assumed to be able to create entry barriers to existing and potential market rivals (Hallen et al., 1991; Wilson, 1995), but that in our opinion is less powerful than the specific impact we are discussing here in terms of raising the profile of host brand and of avoiding host brand development trap. One of our assumptions previously is also proven true that self-owned ingredient brand has significant effect on perceived host brand quality in a positive way.

What else we found surprising with the study is, perceived host brand quality makes less impact on customer satisfaction and customer loyalty than expected despite ingredient brand already being introduced, which is seemingly inconsistent with our assumptions. In further analysis, we will get it explained in four points,

(1) The ingredient brands concerning our study include both independent and self-owned ingredient brands. As self-owned ingredient brand is also involved in competitions against other independent ingredient brand, the overall specimen fails to reflect precisely self-owned ingredient brand as what is owned by the host brand owner, part of the reason for insignificant material impact on customer satisfaction and customer loyalty.

(2) Limited capacity of specimen. With an analysis on a limited number of self-owned ingredient brands, our findings is, self-owned ingredient brand is proven to be of great statistical significance to improving not only perceived host brand quality, but also customer satisfaction and customer loyalty. Disappointingly, that point is still not fully illustrated as the current number of appropriate respondents available for us to survey is merely 117, accounting for only a small percentage of the whole survey

(3) Being positioned as high-end image and actively involved in competitions against other ingredient brands, self-owned ingredient brand hampers the exclusive access host brand of average quality has

(4) Statistical analysis tells us that, those host brands with self-owned ingredient brands are least likely to be designated by the demand side than any other competing host brands. Admittedly, independent ingredient brand enjoys quite a high level of penetration on the market, with no exception for self-owned ingredient brand. The suggestion is, ownership of ingredient brand can translate into increased competitive barrier to other independent ingredient brands by shielding the ingredient brand owner from competitions (Wilson, 1995). As standard configurations to be adopted by host brand, it is practically hard for the self-owned ingredient brand to attract much attention from customers, who are prone to judge host brand quality from those non-brand factors like pricing, personnel, lead time and reputation etc (Bendixen, Bukasa & Abratt, 2004; Kerri-Ann L.K., F. Alpert & N.K.L. Pope, 2008 etc.). In this case, we have seen the role self-owned ingredient brand plays in enhancing customer satisfaction and customer loyalty toward host brand is unexpectedly played down at some point, making it less adequate to back up our assumptions.

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