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

To conclude this academic research into the ingredient branding strategy, we are going to look at a number of different limiting factors to this study, which will be followed by some practical suggestions on what we should rethink in the end.                         

6.2 Limitations on our study

With a backdrop of the entire coal-mining economy in China, we have made an all-round analysis of the relationship between host brand and ingredient brand in equipment-making sector, which is verified to resonate with the arguments by some scholars (R.K. Srivastava et al., 2001; Helmig et al., 2008; etc), and push the boundaries of RBV and marketing theories further to more sub-sectors (self-owned ingredient brand). However, there are still various limitations put on our study, which need to be taken into account and explained for more accurate result analysis.

Limitation 1

In our study, we picked some real host brands along with their corresponding ingredient brands to start our surveying, during which some subjective questions were raised to the respondents on their cognition or non-logical inclinations to the relevant brands, inevitably making the final results distorted to some extent. Real-case study on brand has already come under criticism by some scholars like Keller (1993) and Rao et al (1997), as this sort of sampling is linked with a large amount of complicated elements that could unexpectedly influence the final results and make the entire survey less credible than it is supposed to be. Therefore, the results are prone to be either criticized or interpreted in many other ways. Honestly, concerning brand study, we discover that choosing the appropriate subject for surveying is dependent not only on what the purpose is for conducting the research but also on what the implications are for practicing brand management. To better illustrate the potential associations, we have introduced a number of controlled variables, such as scale of production, educational background and working age etc, which are designed to make the results as accurate as possible. The readers are advised to make reference to the final results from their respective point of view, with their own specific situation taken into consideration seriously.

Limitation 2

Our study is largely dedicated to an analysis of the general levels our domestic mining-equipment manufacturing sector has reached as a whole, which may cause the final results we are going to reveal to be reasonably less universal than expected across the non-mining sectors. Furthermore, as all the subject host brands we picked are purposely positioned in a mid-end market status to facilitate our study, a decent proportion of the leading high-end host brand manufacturers from some of the specific sub-sectors have been unavoidably generalized as a result to fit for the purpose. Hence, our focus of analysis is not put on the high-end ones due to the limited amount of available samples and may consequently cause the results distorted with respect to some relevant sub-sectors, making it to some degree not as workable as in guiding brand management practices.

Limitation 3

At time of sampling, we assume that classification of ingredient brands is going on with adequately rational and experienced purchasing behavior, in order to show the managerial decisions are taken carefully and systematically in strong association with brand’s influence, not purely a result from short-termism weighing economically. This may also cause differentiated responses in individual cognition during surveying, to the personal criteria as to how quality is defined inside their mind. Apart from that, a part of the ingredient brands are also getting involved separately in competitions against other non-branded ingredient products which are self-sufficiently supplied, such as those core components. In this circumstance, ingredient brand has the potential to get involved in market competition as separate commodity, other than as OEM configurations under host brand. We can see this trend from our samples which shows the differences of those configured ingredient brands.

Limitation 4

By studying those non-financial performance indicators like customer satisfaction and customer loyalty, we believe the role ingredient brand plays in improving customer’s perceptions to the host brand quality can be better reflected, but it doesn’t necessarily mean setting out self-owned ingredient brand strategy will deliver financial performance to the same effect. It is because the potential contribution ingredient brand can make to the ultimate financial performance from the host brands can be readily underestimated in many situations where for instance either the market value of the host brand is overwhelmingly huge or the ingredient brand is evaluated extraordinarily less than host brand monetarily. Nevertheless, for the subject ingredient brands concerned in our study, especially in the context of manufacturing of industrial equipment, those commonly-recognized core components can give customers a strong boost of confidence in the host brand that their expectations in relation to functionality or performance will definitely be met, which in return will make customers more satisfied and more willing to purchase. For further analysis over a longer term, it makes more sense to take longitudinal study than to take cross-sectional study, especially when the effect of implementing self-owned ingredient brand strategy needs to be assessed over a complete cycle of industrial economy. This is the most ideal way profound analysis can be made on the effect self-owned ingredient brand has on quality orientation, perceived host brand quality and the ultimate financial performances. Apparently, the samples in our study are inadequate to back it.

Limitation 5

Noticeably, industrial B2B market is a place where the finished products are on offer for subsequent reproduction rather than for consumption, during which performance-related data and experience will be generated and accumulated on a regular basis. Depending on specific applications, a curve of cumulative experience will be formed over time to determine how much trust will be put on that ingredient brand for consideration of purchasing. Pitifully, we are unable to make further analysis of the point.

Limitation 6

There are a few points we havn’t yet been going further with in our discussion, which are, how does self-owned ingredient brand interplay with independent ingredient brand, and how does self-owned ingredient brand affect host brand in market competitions if that very ingredient brand is at the same time going on sale as separate commodities. In the context of a given host brand, developing self-owned ingredient brand may cause indecision for sales, when other competing host brands make competition more fierce by incorporating highly trustworthy self-owned ingredient brand. In this case, it is more prevalent for those competing host brand owners to use Co-Branding that is aimed to take advantage of non-self-owned ingredient brand from outside rather than from inside, making marketing even harder to manage. This is to some extent influential to applying our results to other sectors. The figures 37,38 and 39 from our sub-samples can give you some sensible justifications.     

6.3 Suggestions on further analysis

Based on the conclusions we have drawn so far, there are more things we can think of to offer further suggestions on,

1. During the course of empirical research on B2B brands, we realize that it is not done in as specifically as with those B2C brands. In nature, a large proportion of industrial ingredient products share characteristics with B2C consumer goods in terms of brand attributes and demand behavior. The most striking difference is, while, industrial products are quite long in service life, demanding technically and less applicable across other unintended sectors. What is the case for ingredient brand to interact with host brand in terms of dealing with intangible assets? A question for us to answer after further investigation.

2. What is the role ingredient brand plays in quality failure of host brand? Is the failure of ingredient brand going to have greater negative impact on the trust in host brand? Vice Versa.

3. How could developing brand of average or low quality to raise its profile by ingredient brand marketing?

4. Will the trust in ingredient brand have less or even no significant influence any more in case that host brand is promoted into the high-end market? What is the mechanism of how innovations of self-owned ingredient brand affect ingredient brand strategy?

5. Host branded product is generally a highly complicated structure. So what is the relationship between ingredient brand trust and the key customer perceptions?

6. Realistically, ingredient brand trust probably has both positive and negative effects. Give all our assumptions are based on high-end ingredient brand situations, what is the pathway for the ingredient products of other different brands to make transition into high-end ones? As many more small-and-medium-sized manufacturers who get involved in the supply chain of ingredient products or relevant services do not come under the spotlight of direct competitions, how will they carry on to brand their products or services under clear brand strategy? This is an intriguing subject to take on.

In summary, our study is valuable in leading the empirical research on the correlation between ingredient brand trust and host brand quality, particularly when put into the context of the current industrial equipment market in China. With respect to the industrial B2B market, however, there is still much more for us to explore with brand marketing. In this aspect, our study gives a good insight for those corporate executives as well as academic researchers, making them better understand how brand advantages are developed at corporate level under more effective Co-Branding strategies, like host brand marketing strategy utilizing self-owned ingredient brand trust.

Now we have come to the end of this academic research and thank you all for your time over the past issues. 

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

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