2.2. B2B vs B2C
There are undoubtedly many differences within the brand strategy and how to properly do brand management between B2C and B2B. First of all, the complexity of the products are usually much higher in B2B compared to B2C. B2B purchasers need to be significantly more informed and knowledgeable about the products than B2C customers, because B2C products are generally much more simple and easier for the customer to understand (Kotler and Pfoertsch, 2006, 18). Secondly, the amount of prospects and customers in B2B sales are commonly not as many as in B2C. For obvious reasons, consumer products have a wider range of customers, since they focus on a much bigger market than B2B businesses do. (Ibid) Continuing, the amount of sales volume …show more content…
In B2B contexts, businesses usually buy products that will last for a long time and help with e.g. production and manufacturing for many years. Usually, when businesses buy new products it is well thought out decision, that is often made by more than just one person. However, in consumer contexts, many purchasing decisions are very spontaneous because they do not always come with a big price tag and thus, do not have the same effect. (confirmed by our contact person at VOLVO CE) Lastly, talking about the relationship between customer and seller, It is not uncommon that a very small amount of the customers constitutes to a very large portion of the entire business in B2B contexts, however in B2C businesses, it is more common that there are much more customers and they all together constitute to the revenue more evenly. The relationship between the buyer and the seller in B2C contexts is usually very impersonal and shallow whilst in B2B contexts they generally have to be personal and sustained. (Ibid)
2.3. Brand Strategies
When Volvo starts to operate new brands after the acquisition, they need to select appropriate branding strategy to fit in new markets for those new brands. That is why we hereby provide an overview of the main brand development strategies, supported by the research literatures. According to Kotler and Armstrong (2016:256), there are four main choices …show more content…
Brand extension. Brand extension is expanding a present brand name “to new product categories” (Ibid:257). Thus, brand extension results in creation of new product lines. The benefits of a brand extension are an exigent recognition and rapid acceptance by the customers, as well as possibility to save costs on advertizing (Ibid). However, it might bring the risks to the company related to the blurring of the image of the main brand and the problems related to the fit and appropriateness of the new product to the parent brand (Ibid).
2.3.3. Multibrand. Multibranding is having various brands in same product category (Ibid). In this way, companies set up different features that target different customer segments, so they can gain a great share in the market (Ibid). However, it is possible that each of those brands only acquire a very limited market share, and none of them makes any profit (Ibid). In other words, the effort that companies put into may not pay off (Ibid).
2.3.4. New brand. New brand strategy foresees building a new brand when the old brand image fails or when it creates a new product category “for which none of its current brand names are appropriate” (e.g. creation of a distinct brand directed at luxury customers) (Ibid:259). The negative side of this strategy is that it can result into company “spreading its resources too thin” and having needless amount of brands with too little distinction between them
There are undoubtedly many differences within the brand strategy and how to properly do brand management between B2C and B2B. First of all, the complexity of the products are usually much higher in B2B compared to B2C. B2B purchasers need to be significantly more informed and knowledgeable about the products than B2C customers, because B2C products are generally much more simple and easier for the customer to understand (Kotler and Pfoertsch, 2006, 18). Secondly, the amount of prospects and customers in B2B sales are commonly not as many as in B2C. For obvious reasons, consumer products have a wider range of customers, since they focus on a much bigger market than B2B businesses do. (Ibid) Continuing, the amount of sales volume …show more content…
In B2B contexts, businesses usually buy products that will last for a long time and help with e.g. production and manufacturing for many years. Usually, when businesses buy new products it is well thought out decision, that is often made by more than just one person. However, in consumer contexts, many purchasing decisions are very spontaneous because they do not always come with a big price tag and thus, do not have the same effect. (confirmed by our contact person at VOLVO CE) Lastly, talking about the relationship between customer and seller, It is not uncommon that a very small amount of the customers constitutes to a very large portion of the entire business in B2B contexts, however in B2C businesses, it is more common that there are much more customers and they all together constitute to the revenue more evenly. The relationship between the buyer and the seller in B2C contexts is usually very impersonal and shallow whilst in B2B contexts they generally have to be personal and sustained. (Ibid)
2.3. Brand Strategies
When Volvo starts to operate new brands after the acquisition, they need to select appropriate branding strategy to fit in new markets for those new brands. That is why we hereby provide an overview of the main brand development strategies, supported by the research literatures. According to Kotler and Armstrong (2016:256), there are four main choices …show more content…
Brand extension. Brand extension is expanding a present brand name “to new product categories” (Ibid:257). Thus, brand extension results in creation of new product lines. The benefits of a brand extension are an exigent recognition and rapid acceptance by the customers, as well as possibility to save costs on advertizing (Ibid). However, it might bring the risks to the company related to the blurring of the image of the main brand and the problems related to the fit and appropriateness of the new product to the parent brand (Ibid).
2.3.3. Multibrand. Multibranding is having various brands in same product category (Ibid). In this way, companies set up different features that target different customer segments, so they can gain a great share in the market (Ibid). However, it is possible that each of those brands only acquire a very limited market share, and none of them makes any profit (Ibid). In other words, the effort that companies put into may not pay off (Ibid).
2.3.4. New brand. New brand strategy foresees building a new brand when the old brand image fails or when it creates a new product category “for which none of its current brand names are appropriate” (e.g. creation of a distinct brand directed at luxury customers) (Ibid:259). The negative side of this strategy is that it can result into company “spreading its resources too thin” and having needless amount of brands with too little distinction between them