Wednesday, April 18, 2012

The Challenges of B2B Branding Research

The B2B marketing teams across the world have only recently begun to look beyond the myth that says that “branding is relevant only in B2C categories”. They have finally awoken to the fact that if they understand and utilize the concept of branding, they will fare better than their competitors. They are realizing that developing brand awareness among customers’ customers can help capture a larger share of channel margins and build loyalty that can protect them against price-based competition.

However, there are some basic dynamics that impact B2B marketing significantly and these need to be taken into consideration while developing branding and marketing programs for the B2B segment.

For one, there are, usually, only a few buyers and more over, they are not as transitory as the buyers in the B2C space tend to be. Therefore, both developing and maintaining relationships becomes an important part of the marketing agenda. While this is rather obvious to the B2B marketer, he tends to forget the fact that there is a need to constantly evaluate and thereby strengthen these relationships.

Secondly, the positioning of a B2B brand needs to be done in a way that will ensure a proper fit, accuracy and relevance.  Marketing research plays a crucial role in helping  B2B firms define this positioning.

Thirdly, B2B marketer’s survival kit is, good information about the size and structure of the market. Knowing the size and structure of the market is very essential for the company to enable it to formulate its strategic objectives. Most B2B companies specialize in a narrow market sector and therefore it is necessary to assess the market size and structure from a number of different angles. This adds precision and confidence to the figures and will increase the understanding of how the market is constructed.

Finally, marketing teams in B2B firms suffer from a tendency to look at all marketing effort from a rational, sales-driven, and short-term perspective. Often, by virtue of their technical backgrounds they fall a little short in being creative in their marketing approaches. And so, marketing and communication becomes rather dry, rational and standard across brands, making differentiation very difficult, thus leading to the simplest choice factor, Price.

Obviously, market research has the potential to play an important role in B2B marketing; however, amazingly, most B2B companies conduct no market research at all to speak of.  Or, to put it more precisely, they concentrate on various technical statistical data but make no effort to find out the emotional responses within their target group toward their industry's products and/or services.

Since the B2B market is based on manufacturing and producing goods / services whose need is factual, it is assumed that the decision-making process is equally completely rational. It is believed that "we B2B experts are completely logical and never allow any emotional impulses to intervene in our decision-making process..." but this is not exactly so… What is forgotten, however, is that we are human.  Human nature predetermines behavior and so, every action is triggered by an emotional impulse.  We do almost nothing that does not have some emotional impulse to trigger it off.

Logical thinking is the keyword within the B2B industries because it is the ideal which is sought. However, even though theoretically, it is possible to do something without emotion, even routine activities carry some conviction of emotion, be it boredom or the feeling of responsibility or the emotion of being forced to do it against one's own willingness. The emotion is not often obvious to the person because it's so interwoven with thinking, and that just makes emotional impulses more hidden.

Market research in such a setting, is not something researchers look forward to. For the market researcher, B2B research is usually seen as boring. It is so much more interesting, exciting and glamorous to discuss the new ad for a soft drink, rather than listen to engineers talk about the merits of a new development in a pumps brand. The challenge is to get away from the rational 'work mode' in which these projects normally take place.

B2B marketers, for their part are very skeptical of research output, as they are inclined to question the very approach that research adopts, feeling that they are more suitable to the B2C. Industrial and B2B market survey projects are practical, accurate, and reflective of the particular client needs and the nature of the targeted B2B market. Technology market research, therefore, often requires the researcher to be both knowledgeable in the language and concepts of technical issues, while bringing in a fresh approach to technology marketing issues.

The crucial thing in B2B research (as in B2C) is choosing the right approach.

Traditional quantitative methods face many challenges like –

  1. Choosing the sample size – given that the universe itself is small in the case of B2B, even the usual simple random sampling becomes  expensive as it requires a complete list of the companies from which to make the selection. In a country like India, putting together such a comprehensive list is almost impossible and even in cases where it can be done; it is tedious, time-consuming and very expensive.
  2. Setting quotas within an already small sample size, to ensure that you can get the required width and depth of analysis becomes an additional challenge.
  3. Designing the questionnaire itself, requires the researcher to have a thorough knowledge of both the company and the category. Attribute listing becomes critical to the exercise.
  4. Identifying the right individual for administering the questionnaire- each industry and often each firm within an industry tends to follow a different process for choosing a supplier. The people involved in the decision making process can vary drastically as can the decision making process itself. The final decision maker can also vary, from company to company. Therefore, identifying the right individual to meet, becomes a challenge and requires significant time and effort.
  5. Industrial interviewing is often carried out over the telephone for expediency and economy. Although there will be some loss of data, the cost will be one tenth of a face to face interview. The telephone handicaps the interviewer and respondent in some ways. One can never be sure that the presence of other people at the respondent's end is not influencing the answers, and both parties are inhibited by their verbal powers of description. As a result the face to face interview is cherished in industrial market research, calling for special skills in both obtaining and conducting the interview.
So, qualitative approach is more suitable to B2B research? Not necessarily. Qualitative research faces its own challenges in the B2B space –
  1. Geographical spread of the sample proves expensive, even for convenience based qualitative research sample
  2. Access and availability of respondents is a time-consuming process and can end-up consuming twice as many man-days as budgeted
  3. Multiple interviews within an organization become essential to cover all information and to be able to validate it enough to be able to get a comprehensive perspective.
Therefore, it is essential that industrial market research studies begin to use hybrid designs, incorporating both qualitative and quantitative methods.

Quantitative methods using technology can prove to be more effective is B2B research. Email surveys, web-based discussions can be used extensively and relatively economically to produce valuable information. The fact is that industrial teams respond more positively to a computer screen that allows them the flexibility to complete the survey at their convenience, while also letting them cross-check facts as and when required, than to a researcher sitting across from them and wanting the answers there and then.

Qualitative research methods need to go beyond the traditional depth interview approach that is typically used in B2B research and explore possibilities of using ethnographic observations, projective techniques, visual cues etc to elicit responses that go beyond the rational and delve into the emotional.

Therefore while planning and conducting B2B research, researchers as well as marketers need to ensure the following
  1. Plan the research extremely carefully
    1. Carefully put together the list of key information areas and be clear on how you are going to use the information finally
    2. Evaluate the information already available through secondary sources – from industry information to comprehensive contact lists.
    3. Evaluate accessibility – the geographical spread of the sample and the levels of people that you need to meet
    4. Evaluate the number of people you need to meet to get relevant information
  2. Evaluate different research approaches to identify one, or a combination of approaches that will give you maximum input, in the least time consuming and at least cost
    1. Ensure that you allocate sufficient time and people for assignment
    2. B2B research interviews will often involve a great deal of waiting time; will often be re-scheduled and also cancelled. Therefore the time-plan needs to factor in all these eventualities.
  3. B2B research needs a lot more effort on planning and therefore ensure that
    1. All meetings are planned
      1. Obtaining a market research interview is not easy - the respondent believes (with some justification) that he is giving up his valuable time and may be getting little in return. The best way of approaching a respondent is to be confident, clear, pleasant and businesslike.
      2. To the extent possible, fix meetings directly with the respondent and not through others in the organization
    1. Background info is collected before primary phase commences
    2. If using quantitative method, ensure that there are enough  open-ended Q’s that open the possibility of asking “why is that”
    3. If using a qualitative interview approach, they should be semi-structured with sufficient probing
                                                    i.     Avoid sending out list of topics for discussion, questionnaires etc  as it always gives the respondent a reason to back out
  1. Ensure that you leave a door open, so that you can follow-up for additional information if needed.
  2. While analyzing it is necessary to take a bird’s eye view, rather than focusing on the details so that patterns emerge more clearly and more valuable insights can be drawn.

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