business & industrial marketing

Journal of
Business & Industrial
Marketing
Branding in industrial markets
Guest Editors: Michael Beverland,
Adam Lindgreen and Julie Napoli
Volume 22 Number 6 2007
ISSN 0885-8624
www.emeraldinsight.com
jbim cover (i).qxd 17/10/2007 08:54 Page 1
Journal of Business & Industrial Marketing
Volume 22, Number 6, 2007
ISSN 0885-8624
Branding in industrial markets
Guest Editors: Michael Beverland, Adam Lindgreen and Julie Napoli
Contents
354 Access this journal online
355 Guest editorial
357 Being known or being one of many:
the need for brand management for
business-to-business (B2B)
companies
Philip Kotler and Waldemar Pfoertsch
363 Branding in B2B markets: insights
from the service-dominant logic of
marketing
David Ballantyne and Robert Aitken
372 Branding implications of partner
firm-focal firm relationships in
business-to-business service
networks

Felicia Morgan, Dawn Deeter-Schmelz and
Christopher R. Moberg
383 The importance of brand in the
industrial purchase decision: a case
study of the UK tractor market
Keith Walley, Paul Custance, Sam Taylor,
Adam Lindgreen and Martin Hingley
394 Branding the business marketing
offer: exploring brand attributes in
business markets
Michael Beverland, Julie Napoli and
Raisa Yakimova
400 Sources of brand benefits in
manufacturer-reseller B2B
relationships
Mark S. Glynn, Judy Motion and
Roderick J. Brodie
410 Multiple roles of brands in
business-to-business services
Jane Roberts and Bill Merrilees
418 The role of corporate brand image in
the selection of new subcontractors
Anna Blomba
¨
ck and Bjo
¨
rn Axelsson
431 Executive summary and
implications for managers and
executives

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Guest editorial
About the Guest Editors Michael Beverland is a Senior Lecturer in
Marketing at the University of Melbourne. He has published in several
journals including
Business Horizons
,
European Journal of Marketing
,
Industrial Marketing Management
,
Journal of Advertising

,
Journal of
Business & Industrial Marketing
,
Journal of Business Research
,
Journal
of Management Studies
, and the
Journal of Product Innovation
Management
.
Adam Lindgreen is a Professor of Strategic Marketing at Hull
University of Technology. He has published in several journals, including
Industrial Marketing Management
,
Journal of Business Ethics
,
Business
Horizons
,
Journal of Marketing Management
, and
Psychology &
Marketing
, among others.
Julie Napoli is a Senior Lecturer in Marketing at the University of
Melbourne. She has published in several journals, including
Business
Horizons

,
International Journal of Advertising
,
Journal of Advertising
Research
,
Journal of Business Research
, and
Journal of Small Business
Management
.
Introduction to the special issue on
branding in industrial markets
Branding is gaining prominence among business-to-business
marketers. However, extant research on branding in the
context of business-to-business marketing remains scarce,
with suggested conceptual frameworks lacking empirical
support. Current research suggests that brands play some
role in purchasing decisions in business markets, and that
brands provide a source of competitive differentiation.
Research also suggests that there are differences between
consumer and industrial brand management. While much
literature has been published on consumer brand
management, we lack guidance on key industrial brand
issues, however. Su ch issues include strateg ic brand
management, brand architecture, brand building and
maintenance, brand repositioning, and tactical branding
issues.
This special issue of Journal of Business & Industrial
Marketing addresses some of the research lacunae identified

above.
Following our own Guest Editorial, the first paper, “Being
known or being one of many: the need for brand management
for business-to-business (B2B) companies” by Philip Kotler
and Waldemar Pfoertsch, adds knowledge to the field of
business-to-business brand research by examining the need of
branding for business-to-business companies and analyzing
the options for success by means of the stock performance.
Long-term branding strategies, brand performance and firm’s
business performance are found to be positively correlated
with stock increase. Business performance can be improved
using current brand focus and guiding principles. Also, the
findings suggest that companies should not only focus on
brand development, but rather adopt a long-term branding
strategy.
The second paper, “Branding in B2B markets: insights
from the service-dominant logic of marketing” by David
Ballantyne and Robert Aitken, builds on insights from the
service-dominant logic of marketing. The authors explore
what reciprocal application of resources, knowledge, and
competencies for the benefit of another party means for
brands and branding in a business-to-business context. Also,
several managerial implications are identified as follows. Value
received comes from direct service interactions and
serviceability of goods in use – and is a firm’s principal
branding opportunity. Also, brand marks are transitional
communicative devices, stimulating brand recognition and
reputation. The paper suggests that firms develop or support
brand communities (web-based), contribute to the service
cycle episodes experienced by customers by developing a

strategic branding approach, and co-create value by co-
branding. Lastly, the paper argues that business-to-business
marketing could be emotion-based and not merely logic- and
rational-based.
The third paper, “Branding implications of partner firm-
focal firm relationships in business-to-business service
networks” by Felicia Morgan, Dawn Deeter-Schmelz, and
Christopher R. Moberg, examines, through a conceptual
model, how customers evaluate firms in a strategic, business-
to-business service outsourcing network, and how their
assessment of firms involved in co-producing after-sales
service affects their evaluations of a focal selling firm. Key
factors influencing this relationship include focal brand
strength and the strength of the relationship between the
partner firm and the focal selling firm. Among the study’s
findings are that post-sale business services provided directly
to the customer – irrespective of whether those services are
provided by the firm or its partners – play an important role
in building a firm’s brand image and equity. As such, this is
one of few studies investigating the way customers evaluate
service when it is performed by multiple partners, thereby
providing guidance on ways of improving the service
experience of network customers.
The fourth paper, “The importance of brand in the
industrial purchase decision: a case study of the UK tractor
market” by Keith Walley, Paul Custance, Sam Taylor, Adam
Lindgreen and Martin Hingley, examines the role of branding
in the industrial purchase of agricultural tractors in the UK.
Following explor ative interviews with farmers and farm
contractors, the study identifies through conjoint analysis

the importance of five different attributes in industrial
purchasers’ decisions on tractor brand. Also, the importance
of the attributes by tractor brand ownership is identified.
Lastly, overall brand utility and brand utility by tractor brand
ownership are identified. Among the study’s implications are
that manufacturers and distributors need to maintain a strong
image. Also, they may charge higher prices for tractors, using
the extra revenue to reinforce their brand image. On-farm
demonstration of new tractors could be an experiential
marketing strategy. Special attention should be given to the
location of dealers and the service they provide.
The fifth paper, “Branding the business marketing offer:
exploring brand attributes in business markets”, by Michael
Beverland, Julia Napoli and Raisa Yakimova, considers
attributes for building strong brand identity:
.
product;
.
service;
.
logistics;
.
advice; and
.
adaptation.
Journal of Business & Industrial Marketing
22/6 (2007) 355– 356
q Emerald Group Publishing Limited [ISSN 0885-8624]
355
Two types of brands benefit from product benefits: high

performance brands and ingredient brands. When a product
is conceptualized in ter ms of product innovation or
leadership, brand identity is linked to a firm-level capability.
Products may be augmented with services, suppliers may sell
services rather than products, and sub-contractors may
provide service capabilities to customer s. Logistics,
consisting of capabilities and involving standardized and
customized components, are relevant for retailers seeking to
outsource category management. Suppliers of complex
services and product suppliers of heavy capital items may
pursue adaptation. Lastly, advice is relevant for advertising
agencies, market research agencies, business consulting, and
product suppliers, among others.
The sixth paper, “Sources of brand benefits in
manufacturer-reseller business-to-business relationships” by
Mark S. Glynn, Judy Motion and Roderick J. Brodie,
investigates, through a qualitative study of six grocery and
liquor retailers, what the financial, customer, and managerial
benefits of manufacturer brands are to resellers of packaged
goods. In so doing, the paper is one of the first studies to
examine the role of brands in channel relationships. The
findings help manufacturers to understand and manage their
brands’ benefits and, in turn, enhance the relationships
outcomes with resellers. These outcomes are satisfaction with
the brand, commitment to the brand, trust in the brand,
dependence on the brand, and cooperation with the
manufacturer. Among the study’s managerial implications
are that minor brands are also important to resellers, for
example in countering the strength of major brands in a
product category.

The seventh paper, “Multiple roles of brands in business-
to-business services” by Jane Roberts and Bill Merrilees,
investigates, through a quantitative study of 201 retail tenants,
the role of branding in the context of leasing mall space to
retail tenants. A four-stage process, which leads to renewal of
mall lease, was identified as fitting the data. Brand attitudes
could be explained mainly by service quality. The study also
identified that brand performance played two major roles.
First, brand performed a traditional role as a contributor to
the re-buy or repurchasing decision. Second, brand
performed a role as a builder of relationship quality. As
such, this paper is one of the first to examine the multiple
roles that brands can play in business-to-business marketing.
There are various practical implications of the st udy’s
findings. For example, the study’s findings may be used by
industrial firms to build stronger brands and, in turn, to use
these brands to build better relationships with their business
customers.
Finally, the eighth paper, “The role of corporate brand
image in the selection of new subcontractors” by Anna
Blomba¨ck and Bjo¨rn Axelsson, investigates why and how
corporate brand image plays a role in the selection of new
subcontractors. A qualitative study of three subcontractors
and six of their customers allows for an examination of
buyers’ and sellers’ considerations in sales and purchasing
processes. Among the study’s findings is that the role of
brands is to gain interest, as well as provide trust to
customers. Explicit communications to build trust are
identified relating to different phases of the selection
process. These communications are discussed in terms of

content and source and are translated – in terms of
implications – to the subcontractors.
Specific issues not dealt with in this issue include: what are
current brand development practices in business marketing?
How is brand architecture managed in business markets
(including corporate branding)? Also, what are brand-
building and brand-repositioning capabilities in business
markets (the capabilities behind brand building, maintenance,
and growth)? What are brand extension and repositioning
strategi es? Wha t is t he role of in tegrated marketing
communications in business-to-business branding? What are
important similarities and differences between branding in
business-to-business products and services? What are buyer
receptions to business-to-business branding efforts such as the
importance, or lack thereof, of brands in the purchase
process? What is the role of salespeople in business branding?
Are there different peculiarities of business-to-business brands
in international markets (including global branding issues)?
Lastly, how can business-to-business brands be valued?
We would like to take the opportunity of thanking all those
who have contributed towards this special issue of Journal of
Business & Industrial Marketing. First, we thank the reviewers
who have taken time to provide timely feedback to the
authors, thereby helping the authors to improve their
manuscripts. The reviewing was a double-blind reviewing
process. We thank the following reviewers:
.
Michael Antioco (Eindhoven University of Technology);
.
Liliana Bove (Melbourne);

.
Sonia Dickinson (Curtin University of Technology);
.
Andreas Eggert (Paderborn);
.
Mike Ewing, Francis Farrelly, Samir Gupta, and Raisa
Yakimova (all at Monash);
.
Victoria Little (Auckland);
.
Roger Palmer (Cranfield);
.
Leyland Pitt (Simon Fraser);
.
Pascale Quester (Adelaide); and
.
Christine Vallaster (Innsbruck).
Second, we would like to extend special thanks to the editor
Wesley Johnston (Georgia State University) for giving us the
opportunity of guest editing a special issue of Journal of
Business & Industrial Marketing.
Last, but not least, we warmly thank all of the authors who
submitted their manuscripts (not previously published
elsewhere) for consideration of inclusion in Journal of
Business & Industrial Marketing. We appreciate and are
grateful for the authors’ desire to share their knowledge and
experience with the journal’s readers – and for having their
views put forward for possible challenge by their peers. We are
confident that the articles in this Special Issue contribute to
our understanding of branding in business markets.

Michael B. Beverland, Adam Lindgreen and
Julie Napoli
Guest Editors
Guest editorial Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 355 – 356
356
Being known or being one of many: the need
for brand management for business-to-business
(B2B) companies
Philip Kotler
Marketing Department, Kellogg School of Management, Northwestern University, Evanston, Illinois, USA, and
Waldemar Pfoertsch
Pforzheim University, Pforzheim, Germany and China Europe International Business School, Shanghai, People’s Republic of China
Abstract
Purpose – This analysis aims to examine the need of business-to-business companies for branding and analyzes the options for success by means of
the stock performance.
Design/methodology/approach – The paper consists of a qualitative and quantitative pilot study and a quantitative main survey.
Findings – Long-term branding strategies, brand performance and firm’s business performance are found to be positively correlated with stock
increase. Current brand focus and use of guiding principles can lead to improved business performance.
Research limitations/implications – The study has possible location- and industry-specific limitations.
Practical implications – Managerially, the findings encourage firms to adopt a long-term branding strategy, focusing not only on brand development.
Originality/value – By systematically examining relationships between branding strategy and performance of the global firms, this study adds
knowledge to the field of B2B brand research.
Keywords Business-to-business marketing, Brand management, Marketing strategy, International marketing
Paper type Conceptual paper
An executive summary for managers and executive
readers can be found at the end of this issue.
Introduction
When talking about brands most people think of Coca-Cola,
Apple, Ikea, Starbucks, Nokia, and maybe Harley Davidson.

These brands also happen to be among the most cited best-
practice examples in the area of business-to-consumer (B2C)
branding[1]. For these companies their brand represents a
strong and enduring asset[2], a value driver that has literally
boosted the company’s success. Hardly any company neglects
the importance of brands in B2C.
In business-to-business (B2B), things are different –
branding is not meant to be relevant. Many managers are
convinced that it is a phenomenon confined only to consumer
products and markets. Their justification often relies on the
fact that they are in a commodity business or specialty market
and that customers naturally know a great deal about their
products as well as their competitors’ products. To them,
brand loyalty is a non-rational behavior that applies to
breakfast cereals and favorite jeans – it doesn’t apply in the
more “rational” world of B2B products. Products such as
electric motors, crystal components, industrial lubricants, or
high-tech components are chosen through an objective
decision-making process that only accounts for the so-called
hard facts like features/functionality, benefits, price, service,
and quality, etc. (Aaker and Joachimsthaler, 2000, p. 22;
Pandey, 2007). Soft-facts like the reputation of the business,
whether it is well known, is not of interest. Is this true? Does
anybody really believe that people can turn themselves into
unemotional and utterly rational machines when at work? We
don’t think so.
Is branding relevant to B2B companies? Microsoft, IBM,
General Electrics, Intel, HP, Cisco Systems, Dell, Oracle,
SAP, Siemens, FedEx, Boeing – they are all vivid examples of
the fact that some of the world’s strongest brands are B2B

brands. Although most also operate in B2C segments, their
main business operations are concentrated on B2B. Then why
are so many B2B companies spurning their fortune?
Take Boeing, for instance. Only a few years ago a very
interesting incident happened at the Boeing headquarters in
Seattle. Shortly after Judith A. Muehlberg, a Ford veteran,
started as head of the Marketing and Public Relations
Department, she dared to utter the “B” word in a meeting of
top executives. Instantly, a senior manager stopped her and
said: “Judith, do you know what industry you’re in and what
company you’ve come to? We aren’t a consumer-goods
company, and we don’t have a brand”[3]. Since then US
aerospace giant Boeing has come quite a long way. Nowadays,
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0885-8624.htm
Journal of Business & Industrial Marketing
22/6 (2007) 357– 362
q Emerald Group Publishing Limited [ISSN 0885-8624]
[DOI 10.1108/08858620710780118]
Philip Kotler and Waldemar Pfoertsch have recently published B2B Brand
Management (Springer, Heidelberg/New York, NY, 2006, ISBN 978-3-
540-25360-0); parts of this paper are from this publication.
357
branding and brand management do matter in a big way to
them. In 2000, the company’s first-ever brand strategy was
formalized and integrated in an overall strategy to extend its
reach beyond the commercial-airplane business. Today, the
brand spans literally everything from its logo to corporate
headquarters. Even the plan to relocate its corporate
headquarters from Seattle to Chicago has been devised with

the Boeing brand in mind (Khermouch et al., 2001). In 2005,
Boeing introduced its new flagship aircraft. In a worldwide
campaign with AOL, they searched for a suitable name and
invented the “Dreamliner”, which was inaugurated by Rob
Pollack, Vice President of Branding for Boeing Commercial
Airplanes Marketing[4].
What is branding all about anyway? First of all we can tell
you what it is not: it is definitely not about stirring people into
irrational buying decisions. Being such an intangible concept,
branding is quite often misunderstood or even disregarded as
creating the illusion that a product or service is better than it
really is (Hague and Jackson, 1994). There is an old saying
among marketers: “Nothing kills a bad product faster than
good advertising” (de Legge, 2002). Without great products
or services and an organization that can sustain them, there
can be no successful brand.
Now you may wonder what branding really is all about.
Scott Bedbury, author of the book A New Brand World puts it
as follows:
Branding is about taking something common and improving upon it in ways
that make it more valuable and meaningful (Bedbury, 2002, p. 14).
Brands serve exactly the same general purpose in B2B
markets as they do in consumer markets: they facilitate the
identification of products, services and businesses as well as
differentiate them from the competition (Anderson and
Narus, 2004). They are an effective and compelling means to
communicate the benefits and value a product or service can
provide (Morrison, 2001). They are a guarantee of quality,
origin, and performance, thereby increasing the perceived
value to the customer and reducing the risk and complexity

involved in the buying decision (Blackett, 1998).
Brands and brand management have spread far beyond the
traditional view of consumer-goods marketers. Brands are
increasingly important for companies in almost every
industry. Why? For one thing, the explosion of choices in
almost every area. Customers for everything from specialty
steel to software now face an overwhelming number of
potential suppliers. Too many to know them all, let alone to
check them out thoroughly.
For example, Pitney Bowes, one of the winners in Jim
Collins’s book Good to Great (Collins, 2001), has recently
introduced a new branding campaign. After being on the
success track for more than 15 years, they felt it necessary to
educate their customers about all their new products.
Chairman and CEO Michael J. Critelli explained on
Bloomberg television how Pitney Bowes’s new business-
building brand campaign will fuel the company’s long-term
growth strategy, and his Chief Marketing Officer Arun Sinha
elaborated that a brand is more than a product – it’s a
shorthand that summarizes a person’s feelings toward a
business or a product. A brand is emotional, has a personality,
and captures the hearts and minds of its customers. Great
brands survive attacks from competitors and market trends
because of the strong connections they forge with customers.
And that is what Pitney Bowes wants to achieve with its B2B
customers.
The internet furthermore brings the full array of choices to
every purchaser or decision maker anywhere with just one
mouse click. Without trusted brands as touchstones, buyers
would be overwhelmed by an overload of information no

matter what they are looking for. But brands do not only offer
orientation, they have various benefits and advantages for
customers as well as the “brand parents”. They facilitate the
access to new markets by acting as ambassadors in a global
economy (Khermouch et al., 2001).
Another important aspect of B2B branding is that brands
do not just reach your customers but all stakeholders –
investors, employees, partners, suppliers, competitors,
regulators, or members of your local community. Through a
well-managed brand a company receives greater coverage and
profile within the broker community (Pandey, 2007).
Other than the biggest misconception that branding is only
for consumer products and therefore wasted in B2B, there are
other common misunderstandings and misconceptions
related to B2B branding and branding in general. One
frequently mentioned branding myth is the assumption that
“brand” is simply a name and a logo. Wrong! Branding is
much more than just putting a brand name and a logo on a
product or service.
Take a moment and try to think about what “brand” means
to you personally. Without a doubt certain products, brand
names, logos, maybe even jingles, pop into your head. Many
people think that this is all when it comes to defining brands.
But what about the feelings and associations connected with
these products, brands, companies? What about the articles
you’ve read about them? What about the stories you’ve heard
about them? What experiences have you had with those
products, brands, companies? We could go on and pose more
questions like these. A brand is an intangible concept. To
simplify it and make it easier to grasp is quite often equated

with the more tangible marketing communications elements
that are used to support it – advertising, logos, taglines,
jingles, etc. – but a brand is so much more than that (Dunn
and Davis, 2004; Knapp, 2000):
.
a brand is a promise;
.
a brand is the totality of perceptions – everything you see,
hear, read, know, feel, think, etc. – about a product,
service, or business;
.
a brand holds a distinctive position in customers’ minds
based on past experiences, associations, and future
expectations; and
.
a brand is a short-cut of attributes, benefits, beliefs, and
values that differentiate, reduce complexity, and simplify
the decision-making process.
Keeping all this in mind makes it clear that brands cannot be
built by merely creating some fancy advertising. If you
internalize the concept of “brand” as a promise to your
customers it is quite obvious that it can only come to life if
you consistently deliver on that promise. Of course, your
brand promise needs to be clearly defined, relevant and
meaningful, not to be mistaken with exaggerated marketing
promises.
A further misconception of branding is that it is seen as a
small subset of marketing management. Wrong again! Since a
brand is reflected in everything the company does, a holistic
branding approach requires a strategic perspective. This

Being known or being one of many
Philip Kotler and Waldemar Pfoertsch
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 357 – 362
358
simply means that branding should always start at the top of
your business. If your branding efforts are to be successful, it
is not enough to assign a brand manager with a typically
short-term job horizon within company (Aaker and
Joachimsthaler, 2000).
Building, championing, supporting and protecting strong
brands is everyone’s job, starting with the CEO (Bedbury,
2002). Active participation of leaders is indispensable because
they are the ones who ultimately will be driving the branding
effort. Brands and brand equity need to be recognized as the
strategic assets they really are, the basis of competitive
advantage and long-term profitability. It is crucial to align
brand and business strategy, something that can only
effectively be done if the brand is monitored and
championed closely by the top management of an
organization Aaker and Joachimsthaler, 2000, p. 19). To
appoint a Vice President of Branding, someone who is
responsible solely for brand management, would be an
important step. No matter what the actual title, this person
should be the one person taking the required actions for
keeping the brand in line.
Strong leaders demonstrate their foresight for the brand,
make symbolic leadership gestures, and are prepared to
involve their business in acts of world statesmanship that go
beyond the short term, and therefore require the sort of total

organizational commitment that only the CEO can lead.
Consider Nucor, America’s largest steel producer today. In
1972, about five years after facing bankruptcy, F. Kenneth
Iverson as President and Samuel Siegel, Vice President of
Finance, renamed the company and announced “Nucor sells
steel to people who actually care about the quality of the
steel”. This announcement and all steps that followed
propelled the company to the top of its industry.
But do brands really pay off? Are they worth the effort and
time? Evaluating and measuring the success of brands and
brand management is a rather difficult and controversial
subject. Moreover, it is not always possible to attribute hard
facts and numbers to them, which most marketers certainly
prefer. As a result, there are only a restricted number of
research project and analysis dealing with the actual return on
investment for brands.
Current research results[5] highlight the power of branding.
To visualize the effect of brands and branding on share price,
they compared the financial market performance of 23 of the
30 German DAX companies (see Figure 1). The obvious
result of the enormous difference in performance accentuates
the general importance of brands. Companies with strong
brands have recovered significantly faster from the stock
market “slump” in the wake of the 9/11 terrorist attacks than
weaker brands. Strong brands provide companies with higher
return.
Companies that once measured their worth strictly in terms
of tangibles such as factories, inventory, and cash have to
revise their point of view and embrace brands as the valuable
and moreover equally important assets they actually are

(along with customers, patents, distribution, and human
capital). Companies can benefit tremendously from a vibrant
brand and its implicit promise of quality since it can provide
them with the power to command a premium price among
customers and a premium stock price among investors. Not
only can it boost your earnings and cushion cyclical
downturns, it can even help you to become really special
(Khermouch et al., 2001). The analysis of the largest DOW
companies (see Figure 2) shows an even more drastic
situation[6].
The stock market success of the “over performers” was
even larger than in the first analysis. The top B2B brand
performers were:
.
Caterpillar;
.
GE; and
.
Hewlett Packard.
Caterpillar increased its position in an exceptional way. The
“under performers” were:
.
Intel;
.
IBM;
.
J.P. Morgan; and
.
Microsoft.
It is worth mentioning that between 2002 and 2005 Microsoft

continuously lost brand value. Even in 2002 when the crisis
hit strongly the brand did not lose too much stock value (only
2 6 percent, as compared with an average of 2 24 percent,
and 2 36 percent for the “under performers”). These data
stress the notion that weak brands particularly suffer in
difficult times and do not recover as quickly as strong brands.
These findings also suggest that the brand strength of B2B
companiesclearlyhasanimpactonfinancialmarket
performance.
Ongoing analysis of the largest global companies using the
same methods suggests that the Interbrand value (see
Figure 3) is positively correlated with market capitalization
throughout the years 1999-2006[7], and that the Interbrand
value is significantly positively correlated with income and net
income. We also showed that market capitalization is
significantly positively correlated with income and net
income. Market capitalization is not correlated with
advertisements.
The definition, benefit, and functions of brands embrace
every type of business and organization. In order to create and
maintain the sustainable competitive advantage offered by the
brand, companies need to concentrate their resources,
structure, and financial accountability around this most
important asset. Businesses with a strong brand positioning
are benefiting from clarity of focus that provides them with
more effectiveness, efficiency, and competitive advantage
across operations (Clifton and Simmons, 2003).
B2B brand advocates underline that the real importance of
brands in B2B has not yet been realized. McKinsey &
Company is one of them. Together with the Marketing

Centrum Muenster (MCM), one of the best known German
research institutes, they investigated and analyzed the
importance and relevance of brands in several German B2B
markets. They revealed that the most important brand
functions in B2B are (Caspar et al., 2002, p. 13):
.
increase information efficiency;
.
risk reduction; and
.
value added/image benefit creation.
Since these functions are essential determinants of the value a
brand can provide to businesses, they are crucial in regard to
determining brand relevance in certain markets (Caspar et al.,
2002). The above mentioned brand functions are also vital to
B2B markets.
Nobody can guarantee that a business will realize
immediate benefits after implementing an overall brand
strategy. Since branding requires a certain amount of
Being known or being one of many
Philip Kotler and Waldemar Pfoertsch
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 357 – 362
359
investment, it is more probable that it will see a decline in net
profits in the short run. Brand building is aimed at creating
long-term non-tangible assets and is not meant for boosting
short-term sales. Michael J. Critelli, CEO of Pitney Bowes
(Sinha, 2003) is aware of this and ran re-branding efforts over
a period of many years to ensure his company’s future success.

In the 1980s, personal computers gradually entered the
homes of consumers. At that time the highly recognized brands
in the industry were those of computer manufacturers like IBM,
Apple, and Hewlett-Packard. Back then, only the most
sophisticated computer users knew what kind of
microprocessing chip their machines contained, let alone who
made them. All that changed in 1989, when Intel decided to
brand its processors. Because of the accelerating pace of
technological change as well as constantly growing sales rates in
the consumer market, the company decided to focus on end
users. They realized that establishing a brand was the only way
to stay ahead of the competition. Today, Intel is a leader in
semiconductor manufacturing and technology, supported and
powered by their strong brand, an almost unbeatable
competitive advantage, due to the ingredient branding
approach and the “Intel Inside” campaign, an approach
which will be important for increasingly sophisticated
customers (Kotler and Pfoertsch, 2007).
It is also not the intention to claim that B2B branding is the
answer to all your company’s problems. Just as there are
Figure 1 Branding’s effect on DAX companies’ share price
Figure 2 Branding’s effect on DOW companies share price
Being known or being one of many
Philip Kotler and Waldemar Pfoertsch
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 357 – 362
360
limitations in the B2C branding world, limitations also exist in
B2B. These restrictions still have to be identified and
examined thoroughly in the following years.

To lead you through B2B branding exercises we suggest a
set of “guiding principles” (see Figure 4) that illustrate
visually the different stages on the branding ladder[8]. It can
literally be seen as the path companies have to follow in order
to achieve brand success. The beginning of the path is marked
by the decision whether or not to brand your products,
services, or business. If a company, especially the people at
the top, is not convinced that it is the right thing to do, it
doesn’t make any sense to continue (“B2B Branding
Decision”). After making the decision to brand, you have to
figure out how you are going to do it. But deciding on the best
brand portfolio that fits your respective business/industry is
not enough to ensure your company’s brand success.
Therefore, the next stage addresses all the factors in
practice that make branding successful (“Branding
Dimensions”). If the right decisions are not taken
(“Acceleration through Branding”) or the execution falls
short, branding pitfalls can occur! But there could also be
future perspectives.
The essence of this concept is to infect B2B companies with
the branding virus – empowering them to make the leap to
becoming a brand-driven and more successful company.
There are many ways to measure overall company success,
such as sales increase, share value, profit, number of
employees, mere brand value (index), etc. To keep it simple
and to limit alterations that may have been influenced by
various sources other than the actual brand, we chose sales
over time as measurement for a company’s success in our
Guiding Principle. The transition point represents a
company’s rise to the challenge of building a B2B brand.

In our constantly changing business environment of new
technologies, globalization and market liberalization, alert
companies are presented with great opportunities. Winning
companies will discard old practices and innovate new
practices to exploit the major trends. With no thought B2B
branding and brand management will become increasingly
important, and the future of brands is the future of business –
probably the only major sustainable competitive advantage.
Companies who are driving in this direction are on the right
track. Other future aspects are branding and social
responsibility. Also, branding in China is in a stage of
leapfrogging into the world market. For decades, China has
enjoyed a dominant place in world manufacturing because of
its low-cost labor. Chinese businesses today are pursuing
aggressive branding strategies involving internal growth or
acquiring foreign brand icons and managing them. Both
approaches could lead to world success. Consider design and
branding as an increasingly important tool for differentiation.
Relevance, simplicity, and humanity – not technology – will
distinguish brands in the future.
To be successful in the B2B world, a holistic branding
approach is required that covers everything from the
development and design to the implementation of marketing
programs, processes, and activities that are intersecting and
interdependent. Marketing and brand management will be
critical to a company’s success in the future.
Notes
1 B2C companies have for years dominated the Interbrand
ranking of the 100 best global brands by more than 80
percent, and most of the article is about them (see Berner

and Kiley, 2005).
2 According to our calculations, in 2005 the total brand
value for all 100 best global brands reached more than $1
trillion.
3 As quoted in Khermouch et al. (2001).
4 The Boeing Company (internet), cited August 2005.
5 In 2005, a qualitative and quantitative pilot study was
conducted with the 30 largest German DAX companies;
of these, ten were B2B companies.
6 For this analysis the Interbrand Global Best Brand data
were used to characterize the brand performance.
7 The Interbrand brand evaluation started in 1999 and is
available annually. In our research we compiled all
internationally available data, which led to a total of 130
companies. Further research is needed to qualify the
findings.
8 We understand the Guiding Principle as the leading idea
and guiding help to follow our thinking and the structure
of B2B brand management.
Figure 3 Correlation between Interbrand brand value versus market
capitalization of DOW companies
Figure 4 Guiding principles for B2B brand development
Being known or being one of many
Philip Kotler and Waldemar Pfoertsch
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 357 – 362
361
References
Aaker, D.A. and Joachimsthaler, E. (2000), Brand Leadership,
The Free Press, New York, NY.

Anderson, J.C. and Narus, J.A. (2004), Business Market
Management: Understanding, Creating, and Delivering Value,
Pearson Prentice-Hall, Englewood Cliffs, NJ, p. 136.
Bedbury, S. (2002), A New Brand World, Viking Penguin,
New York, NY.
Berner, R. and Kiley, D. (2005), “Global brands”, Business
Week, July, pp. 86-94.
Blackett, T. (1998), Trademarks, Macmillan, Basingstoke.
Caspar, M., Hecker, A. and Sabel, T. (2002),
“Markenrelevanz in der Unternehmensfuehrung –
Messung, Erklaerung und empirische Befunde fuer B2B-
Maerkte”, p. 13, available at: www.marketing-centrum.de/
ias/conpresso/_file/AP_B2B_3010.pdf
Clifton, R. and Simmons, J. (2003), Brands and Branding,
Profile Books, London, p. 5.
Collins, J. (2001), Good to Great: Why Some Companies Make
the Leap and Others Don’t, Random House, New York, NY.
de Legge, P. (2002), “Brand version 2.0: business-to-business
brands in the internet age”, Marketing Today, available at:
www.marketingtoday.com/marketing/1204/brand_v2.htm
Dunn, M. and Davis, S.M. (2004), “Creating the brand-
driven business: it’s the CEO who must lead the way”,
Handbook of Business Strategy, Vol. 5 No. 1, pp. 241-5.
Hague, P. and Jackson, P. (1994), The Power of Industrial
Brands, McGraw-Hill, London.
Khermouch, G., Holmes, S. and Ihlwan, M. (2001), “The
best global brands”, Business Week, 6 August.
Knapp, D.E. (2000), The Brand Mindset, McGraw-Hill, New
York, NY, p. 7.
Kotler, P. and Pfoertsch, W. (2007), Ingredient Branding:

Making the Invisible Visible, forthcoming.
Morrison, D. (2001), “The six biggest pitfalls in B-to-B
branding”, Business2Business, July/August, p. 1.
Pandey, M. (2007), “Is branding relevant to B2B?”, 27
January, available at: brandchannel.com
Sinha, A. (2003), “Branding in a deregulated environment”,
Keynote Address, Post-Expo 2003, available at: www.pb.
com/bv70/en_us/extranet/contentfiles/editorials/downloads/
ed_pres_arun_css_ed_pres_arun_brand_speech_arun.pdf
Corresponding author
Philip Kotler can be contacted at:
Being known or being one of many
Philip Kotler and Waldemar Pfoertsch
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 357 – 362
362
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Branding in B2B markets: insights from the
service-dominant logic of marketing
David Ballantyne and Robert Aitken
University of Otago, Dunedin, New Zealand
Abstract
Purpose – This paper aims to explore how the service-dominant (S-D) logic of marketing proposed by Vargo and Lusch impacts on business-to-
business branding concepts and practice.
Design/methodology/approach – Vargo and Lusch argue that service interaction comes from goods-in-use as well as from interactions between a
buyer and a supplier. Their key concepts are examined and the branding literature critically compared.
Findings – Goods become service appliances. Buyer judgments about the value-in-use of goods extends the time-logic of marketing. The exchange
concept is no longer transaction bound. Service-ability (the capability to serve) becomes the essence of a firm’s value propositions. Service experience
becomes paramount in developing and sustaining the life of a brand.

Research limitations/implications – S-D logic highlights the need for rigour and clarity in the use of the term “brand”. It also opens up for
consideration a variety of previously unexplored contact points in the customer service cycle, expanded to include customer assessments of value-in-
use.
Practical implications – S-D logic encourages extending brand strategies into a wider variety of communicative interaction modes.
Originality/value – Some of the issues raised are not new but currently compete for attention in the shadow of media-dominant approaches to
branding.
Keywords Brand image, Value added, Value-in-use pricing, Marketing, Knowledge management, Relationship marketing
Paper type Conceptual paper
An executive summary for managers and executive
readers can be found at the end of this issue.
Introduction
The service-dominant (S-D) logic of marketing proposed by
Vargo and Lusch (2004a) emphasises that customers make
critical value assessments when goods are in use, based on
their service-ability. Put another way, goods become service
appliances and customers judge the worth of the service they
experience from goods as value-in-use. Thus “service”
according to S-D logic includes the service experience
derived from interacting with goods in use as well as from
service interactions with a supplier. So, by extending the
temporal dimension of marketing to cover the service
experiences derived from goods, and by aligning exchange
thinking around value-in-use, the concept of marketing
becomes service-dominant, and exchange is no longer
transaction-bound. Every value proposition is an offer of
service. Every business becomes a service business.
This brief introduction shows that the S-D logic of
marketing has both radical components and also familiar
associations for business-to-business (B2B) marketers.
“Service interaction” is broader in concept and extended in

time. It involves the reciprocal application of resources,
knowledge and competencies for the benefit of another party.
The emphasis in S-D logic on value-in-use is potentially
paradigm challenging but the foundational principle of
interaction resonates well with much of contemporary
marketing thought in services marketing, relationship
marketing and B2B marketing.
Understanding what S-D logic means in particular for
brands and branding in a B2B context is the intent of this
article. We start with a commentary on the S-D logic thesis.
Next, we offer a critical examination of current thinking on
brand marks and brand meanings. Then, we examine the
contribution of S-D logic to understanding B2B branding.
From this, the role of marketing communication in all its
forms becomes clear as a source of brand meanings. Finally,
we draw some conclusions that we believe have important
implications for practitioners.
Commentary on S-D logic
The catalyst for the current interest in an S-D logic for
marketing was the publication of an award-winning article by
Vargo and Lusch (2004a) entitled “Evolving to a new
dominant logic for marketing”. In the same year, another
article by Vargo and Lusch (2004b) appeared, directly
challenging the validity of the characteristic differentiators
between services and goods (intangibility, heterogeneity,
inseparability and perishability), which had been established
more than 20 years earlier (see Fisk et al., 1993). In 2005, the
University of Otago in New Zealand invited a number of
leading international academics to The Otago Forum[1] to
debate the issues. A selection of papers from the Forum,

together with commentaries, later appeared as a special issue
of Marketing Theory (Aitken et al., 2006). Also, Lusch and
Vargo (2006a) published an editorial selection of articles by
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0885-8624.htm
Journal of Business & Industrial Marketing
22/6 (2007) 363– 371
q Emerald Group Publishing Limited [ISSN 0885-8624]
[DOI 10.1108/08858620710780127]
363
leading scholars early in 2006. The Journal of the Academy of
Marketing Science will publish a special issue on S-D logic in
2007.
The idea behind the Vargo and Lusch thesis is simple, but
the effects are far reaching: S-D logic asserts that service is
what customers are hoping to buy, anywhere, any time. Of
course, service interaction in business markets is not new but
under S-D logic, goods purchased become service appliances.
In other words, a supplementary form of service experience
comes from goods, as buyers interact with those goods. If
goods become valuable to customers, as mechanisms for
service, it follows that the value of the experience derived
from goods is determined at time of use by customers, as
value-in-use[2]. This applies equally in an industrial setting as
goods (resources) become part of a customer’s own value
creating inputs, whether in manufacture, assembly or
distribution.
Service activity, of course, comprises a greater proportion of
GNP than goods in many countries, but this is not the
“service-dominant” meaning of Vargo and Lusch. Instead,

they seek to show that service is the undeniable core of every
marketing interaction. This is not a mainstream marketing
way of thinking but it has been emphasised by others, for
example, in services marketing by Gro¨nroos (1990), in
relationship marketing by Christopher et al. (1991), and –
which may surprise some – in an early text by Kotler (1976).
However, Vargo and Lusch (2004a) extend their service-
centricity further. The essential points in summary are these:
.
S-D logic emphasises that customers are the arbiters of
value in service interaction, either directly in interaction
with suppliers or through service interaction derived from
goods.
.
S-D logic also emphasises the potential for co-creation of
value and sharing of competencies and other knowledge
resources between customers, suppliers and other market
actors. Again, value is derived from the service experience
of the particular actors in interaction.
.
S-D logic supports the notion of relationship development,
through which all kinds of communicative interaction and
co-created value might emerge over time. This forces
marketing innovation to the fore, in the sharing of new
ideas and knowledge within the firm, and between the firm
and its customers and suppliers.
.
S-D logic proposes that what a supplier firm essentially
does in its marketing activity is offer value propositions
(promises) and marshal resources together for customers.

This puts a new perspective on selling activity, marketing
communication and brand management, as will be
discussed later.
.
S-D logic requires a managerial focus on the customer
interaction processes, and attention to monitoring the
productivity and value potential of the continuous activity
flows. Rather than firms marketing to customers they
market with customers (an interaction process). The
bottom line is that marketing exchange becomes a set of
interactive episodes across time and is no longer
transaction-bound.
Overall, S-D logic has the potential to shift strategic
marketing attention away from a point-of-sale selling focus
to a service relationship focus, and in so doing, to rearrange
marketers’ notions of efficient resource allocations. Put
another way, to reveal the challenging aspect of this agenda,
the time logic of marketing exchange becomes open-ended,
from pre-sale service interaction to post-sale value-in-use,
with the prospect of continuing, as relationships evolve
(Ballantyne and Varey, 2006).
Until quite recently, exchange in a marketing context was
synonymous with a market transaction. Under such logic,
derived from mainstream goods logic and with origins in the
neo-classical economic paradigm, any “value added” for
customers is also a cost to the firm. This linear logic has been
under constant challenge in B2B marketing and services
marketing domains due largely to the influence of relational
perspectives entering the literature over the last 20 years (see
for example, Anderson and Narus, 1990; Axelsson and

Easton, 1992; Berry, 1995; Christopher et al., 1991; Dwyer
et al., 1987; Gro¨nroos, 1990; Gummesson, 1987; Ha
˚
kansson
and Snehota, 1995).
Lusch and Vargo (2006b) have recently outlined a lexicon
of terms for the S-D logic which indicates the kind of
cognitive shift involved in rethinking the scope of marketing
action (see Table I). This is clearly a provisional list that
invites further work. For example, under S-D logic, customers
engage in buying “service solutions” to solve problems rather
than buying product benefits or features. But what if there are
no problems? Why should marketing innovation be restricted
to problem solving? Also, “promotion” is a limited form of
marketing communication. Dialogue is by far a superior way
of learning together. Both would seem to have their place as
part of a more interactive concept of integrated marketing
communications (Varey and Ballantyne, 2005).
What is absolutely clear under S-D logic is that any value
judgment at point of purchase by a customer is necessarily
provisional. Thus, the capability to perform and the reliability
of the firm become critical aspects of the firm’s value
propositions. With the function of goods seen as service
appliances, value-in-use will confirm or disconfirm these
provisional judgments. There are important implications for
branding here. We believe it works this way: The brand (as a
tangible mark) serves to signify the nature of the firm’s
promises and implicit obligations, and customers and other
stakeholders project these or any other values they see fit back
into the brand (as a socially constructed value system). This

“brand morphing” is examined in the next section.
Marks and meanings critically examined
Coverage of branding issues in the B2B literature has been
sparse (Michell et al., 2001). A natural enough tendency has
been to associate branding with fast moving consumer goods
and so branding in this domain dominates the research
picture. However, there are notable exceptions, for example
Baldauf et al. (2003), Bendixen et al. (2003) and Mudambi
et al. (1997). Yet, while brands are one of the most researched
topics in the marketing literature, ambiguity rather than
clarity of understanding has been the outcome.
Ambiguity and complexity begin with the almost universal
habit of using the single word “brand” in at least three
different marketing contexts. First, when “brand” means a
name or identifier, and second, when “brand” means a
product and its characteristics. Then there is a third and more
obtuse way of using “brand”, and that is as a symbolic
framing device for utilitarian and non-utilitarian values that
customers and others may see as attributes belonging to the
brand, as if these values were embedded characteristics of the
Branding in B2B markets: the service-dominant logic
David Ballantyne and Robert Aitken
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 363–371
364
product (see, for example, the seminal paper by Levy, 1959;
also Lindlof, 1988; Salzer-Mo¨ rling and Strannega
˚
rd, 2004).
This three-mirrored view of brands, we hope, is more

revealing as an explanation than that offered by the American
Marketing Association (AMA), who state that:
A brand is a name, term, sign, symbol, or design, or a combination of them,
intended to identify the goods and services of one seller or group of sellers
and to differentiate them from those of competitors (Kotler, 2000, p. 404).
Variants of this AMA definition occur in all major
introductory marketing texts and also in more specialist
treatments of brands and branding (see, for example, Aaker,
1991, 2004; Wilson et al., 1995).
Brands at a fundamental level certainly are marks or
symbols, the marketing purpose of which is to identify and to
differentiate one product from another, or one firm from
another. A brand, however, is much more that its brand-mark.
Any firm hopes that its stakeholders and target markets, both
customers and future prospects, will find its brand mark to be
memorable and associated with positive values about the
product or the company. However, Aaker and Joachimsthaler
(2000) comment bleakly that, within the traditional branding
model, the brand is a tactic used to drive short-term results.
Even more problematically, many firms assume that the
meanings associated with the brand mark are something they
uniquely own and control. We take the contrary view that says
suppliers and their customers and other stakeholders co-create
brand meanings, that is to say, brand meanings are socially
constructed and in the public domain. It follows that diverse
interactions, discussions and opinions generate and
regenerate any firm-based notions of brand value.
Some authors make a distinction between the firm’s brand
identity and its brand image (see, for example, De
Chernatony, 1999). We find the identity/image distinction

helpful in describing some aspects of brand thinking. The
distinction works this way: a firm’s brand identity is an
idealised set of firm-generated propositions communicated to
customers and other parties by whatever communicative
means available. This notion of brand identity is by no means
automatically accepted by target audiences because the
collective thoughts and feelings that individuals and industry
groups hold at any time about the brand-mark meanings are
ultimately of their own determination. Hence, we come to
brand image as representative of perceptions within the market
place, and beyond.
Any brand image in our view is essentially socially
constructed (see Berger and Luckman, 1967; Gergen, 1994;
Hackley, 1998). This means that brand image is not just the
sum of individual perceptionsbutasharedreality,
dynamically constructed through social interaction. If this
perspective is accepted, the meanings attached to a particular
brand are located in the minds of its customers, and the wider
community of opinion makers and stakeholders. It will likely
differ from the hoped-for perspective of the marketer or brand
manager. Also of note, the usage of the term “brand” to cover
multiple meanings is a recipe for ongoing confusion and
manipulation. In a related way, Varey and Ballantyne (2005)
have argued that advertising as the dominant form of
marketing communication declares its motives but often
conceals its methods. In the traditional logic of branding the
same applies, but here methods concealment potentially
extends to those who use them, a case of branding myopia.
So far, we hope to have shown that the logic of branding
inherited from mainstream (consumer) markets is ambiguous

at least, and we have tracked the source of confusion to the
semantics of the term “brand” itself, and to the current
paradigmatic tension over where the brand “resides”, i.e.
either in the strategic plans of the marketer or in the heads of
the users and indeed other stakeholders.
We now explore what the S-D logic of marketing means for
brands and branding, especially in a B2B context.
Branding logic seen from the perspective of S-D
logic
The analysis that follows draws from the fundamentals of the
Vargo and Lusch (2004a) thesis. However, an elaboration of
branding strategy is not specifically part of their thesis, a point
also made by Brodie et al. (2006).
S-D logic has the useful potential to shift strategic
marketing attention away from a point-of-sale selling focus
to a service and relationship development focus, and in our
view, important implications follow for branding strategy.
Under S-D logic, any brand value judgments at point of
purchase by customers are provisional, awaiting testing in
action. Service-ability (as the service capability derived from
goods) thus becomes a critical risk factor in fulfilment of the
firm’s value proposition. Put another way, brand value is
confirmed or disconfirmed in-use, at time of use, as
Table I What’s happening to marketing concepts?
Goods-dominant logic concepts Transitional concepts Service-dominant logic concepts
Goods Services Service
Products Offerings Experiences
Feature/attribute Benefit Solution
Value-added Co-production Co-creation of value
Profit maximization Financial engineering Financial feedback/learning

Price Value delivery Value proposition
Equilibrium systems Dynamic systems Complex adaptive systems
Supply chain Value chain Value-creation network/constellation
Promotion Integrated marketing communications (IMC) Dialogue
To market Market to Market with
Product orientation Market orientation Service orientation
Source: Lusch and Vargo (2006b)
Branding in B2B markets: the service-dominant logic
David Ballantyne and Robert Aitken
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 363–371
365
customers confirm or disconfirm the value proposition. As has
been discussed, the time logic of marketing exchange under S-
D logic is open-ended. The open-ended nature of brand
relationships means that individual perceptions of brand (the
meanings that become associated with a brand mark) are part
of a brand’s wider stakeholder associations, whether based on
direct first-hand experience (value-in-use), or through
indirect experience shared or circulated in communicative
interaction, media-based or otherwise.
What are the specific B2B brand management implications
of this S-D logic?
A brand-mark is a relational asset whose value to the
firm is contingent on past, present and future
interactions with various firm stakeholders
A firm rightly controls its brand-marks, which are the tangible
evidence of its brands. They also control the trademarks and
copyrights that support the brands. Brands have histories and
hopefully futures. However, marketers cannot naively assume

that they have sufficient brand power or market dominance to
control the meanings ascribed to their brands by others.
Many trade journal commentaries on brands and branding
obfuscate the identity and image meanings associated with a
brand mark. Difficulties arise when marketing managers,
without reference to product defects that will impinge on
customer value-in-use experiences or firm-to-firm
interdependencies, seek to develop marketing
communication programs to improve “brand image”. Such
split-task thinking can lead to a branding logic that pays more
attention to communicating the value proposition than
product efficacy (improving product service-ability). Both,
of course, are aspects of customer relationship development.
A brand-mark is an aid to memory
Thebrand-markofferscommunicableevidenceofthe
product and past value-in-use experiences, and is an index
for customers to cognitively file such brand meanings,
especially the customer’s inferred reputation of the “brand”
(in all its variety of meanings). For example, Keller’s (1993,
2003) Customer-based brand equity (CBBE) model could be
adapted for use in a B2B environment. Defining CBBE as
“the differential effect that brand knowledge has on consumer
responses to the marketing of that brand”, he states that the
model is based on the belief that “the power of a brand lies in
what customers have learned, felt, seen and heard about the
brand as a result of their experiences over time” (Keller,
2003, p. 59).
There is a contrary point of view that says a brand-mark is
not essential to create brand meaning. For example, a “no-
name” brand is sometimes successful where the strategy is to

cultivate a trendy anonymity within a word-of-mouth
generated community of users (Ballantyne, 2004a, p. 423).
Nevertheless, the more common position is that brand-marks
serve to represent (or stand in for) the product or firm.
Only by coupling the brand-mark and product (or firm)
reputation together is it appropriate to talk of brand
meaning (the brand as a symbolic framework for
indexing meanings)
It may seem trivial to make this point but it takes social
interaction and product use together to sustain brand
meanings,unlessitisargued(asmanydo)thatthe
dominant source of brand meaning is that projected by the
firm in marketing communication (brand identity) and
accepted by target audiences (brand image). With this latter
perspective, the responsibility for the brand is assumed to
reside totally with the marketing department (Davis, 2002),
so the focus becomes more tactical and reactive than strategic
and visionary (Aaker and Joachimsthaler, 2000). This is a
difficult position to sustain in S-D logic terms as it ignores the
value-in-use derived from a product by a customer over time,
and also the word-of mouth communicative effects generated
from within brand communities (see, for example, Andersen,
2005; Muniz and O’Guinn, 2001). In our view, developing
brand image solely by traditional media message-making in a
B2B context (indeed in any context) is like trying to capture
someone’s attention by clapping with one hand.
Brand strategies can impact positively or negatively on
the strategic positioning of firms within business
networks of relationships
The concept of network positioning (Ha

˚
kansson and Snehota,
1995) is not to be confused with brand positioning. The point
here is that many brand strategies develop with the customer
specifically in mind, and yet the branding implications extend
to resellers and other stakeholders. The latter group includes
employees who must fulfil the brand promises made to
customers as value propositions in S-D logic terms, and
resellers who co-create value with their customers from a
diversity of upstream sources and resources. Managing often
conflicting stakeholder requirements requires particular
coordination skills and a developed cognitive framework to
assist in the task (Payne et al., 2005).
De Chernatony (1999) has suggested that employees are
major stakeholders in brand building efforts. He suggests that
the brand should represent the vision and culture of the firm,
and this necessarily involves employees and staff in shaping
and representing a firm’s values. Corporate branding has
undergone similar shifts in emphasis to encompass employees
as stakeholders in recent years (Hatch and Schultz, 2003).
Branding is essentially a form of communicative
interaction
An important question for firms is: at what point does the
awareness of a brand and its assumed meaning actually begin?
The formulation of brand perceptions and the non-specific
nature of their timing fit closely with the S-D logic emphasis
on value and its creation, past, present and future. There is
room for an expansion of media-driven branding where
brand-marks serve to represent the firm’s product benefits and
projected values, necessarily modified by the efficacy of the

product and its value-in-use, and opinion generated by word-
of-mouth in the target markets and in the business
community at large.
A useful framework for re-focussing corporate branding
that fits with S-D logic is presented by Hatch and Schultz
(2003). In this structure, three elements are central:
1 strategic vision;
2 organisational culture; and
3 corporate image.
However, if the gap between the projected image and the
reality of the customer experience widens, customers smell
hypocrisy. Reputation matters.
Branding in B2B markets: the service-dominant logic
David Ballantyne and Robert Aitken
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 363–371
366
The limits of advertising as a source of brand
meaning
Brand advertising is a dominant and favourite communication
medium for making branding messages in fast-moving
consumer goods (FMCG) industries. However, to the
extent that brand advertising promises are persuasive,
studies of product diffusion and communication show that
people are more inclined to act on mass-media messages if
confirmed by word-of-mouth from trusted relationship
sources (see, for example, Rogers, 1995). This does not
mean that trusted sources are always correct: it means that
they have a higher status of reliability.
Marketing communication today still basically operates as a

one-way, media-based message making system (Varey and
Ballantyne, 2005). This hegemonic message-making logic
dominates in marketing texts, and in use, notwithstanding the
emergence of more interactive perspectives represented by
integrated marketing communication (e.g. Duncan and
Moriarty, 1998; Gro¨nroos and Lindberg-Repo, 1998).
However, even integrated marketing communication
perspectives give limited cover on how to co-create
meaning, acquire knowledge or achieve flashes of inspired
understanding.
We think it limiting to consider interaction and
communication as separate processes. Any form of
interaction between buyer and supplier acts as a source of
brand meaning, whether this is direct experience with a
product or supplier firm, or derived experiences passed on
from other users, advertising messages, and news media
including such new forms as internet weblogs.
It is possible to put communication and interaction back
together again by combining three useful and traditional
forms (see Table II). Communication can be informational,
communicational, and dialogical (Varey and Ballantyne,
2005). The informational mode includes message-making,
which has the useful intention to inform. Next, much of
integrated marketing communication’s (IMC) aspirations are
grounded in the communicational mode, where listening and
informing are key aspects of interaction. Finally, dialogue is a
process of learning together and it works in support of
innovation and the co-creation of value[3]. The purpose of
dialogue is always open-ended, learning-oriented and value-
creating (Ballantyne, 2004b; Ballantyne and Varey, 2006).

The concept of brand community fits this broadened
communicative context for creating brand meaning.
According to Muniz and O’Guinn (2001), a brand
community is a “specialised non-geographically bound
community that is based on a structured set of relationships
among admirers of brands” (p. 412). Brand communities
share a number of core characteristics that include shared
rituals and behaviours, and a sense of moral responsibility
between members that relates to brand values, as they see
them.
An allied concept of brand community provided by Cova
(1997) suggests that post-modern society is characterised by
tribal affiliations that function to develop a series of
communal linkages. Individuals today are not only looking
for service which enables them to be free but also something
which can link them into a community of others, as if in a
tribe (Cova, p. 311). There seems to be no reason to suppose
that this tribal logic does not to some extent also apply to
industrial buyers (remembering it was once said with
conviction that “Nobody ever got sacked for choosing
IBM”). S-D logic and its emphasis on service experience
rather more than the service promise, on co-creation of value
and mutual updating of knowledge, all make sense in this
context.
S-D logic calls for a broadening of marketing
communication modes used between exchange parties, from
informational, through communicational to dialogical. No
one modality need take precedence, but certain business
contexts and situations will call for certain communicational
responses. However, S-D logic particularly supports dialogue

as a means of learning in interaction together, in the context
of ongoing business relationships.
Conclusions
Branding under S-D logic becomes a communicative
interaction process whereby firms attempt to support the
intended meanings of their value propositions. However, we
go further and say that brand value is confirmed or
disconfirmed in use, at the time of use, as customers
confirm or disconfirm the value propositions in play. Let there
be no doubt that value propositions are essentially promises to
perform. Customers will make their most important
judgments of value received through direct service
interactions with supplier firms and on service-ability of
goods-in-use. Put another way, the time-logic of marketing
exchange is open-ended, from pre-sale service interaction to
post-sale value-in-use (Ballantyne and Varey, 2006). This
alone completely rearranges branding opportunities and
possible impacts.
S-D logic further suggests that it is the service experiences of
customers that most commonly impact on brand value,
through brand awareness and brand memory. Indeed, given
the potential longevity of brand preferences and brand
Table II A classification of forms of interaction
Mode of social association Underlying decision practices Source of value
Form of “market” system
governance
Informational: persuasive
message making
Controlling and coercing Promised by
selling

the benefits Power inequivalence (perceived as
domination)
Communicational: informing
and being informed
Ethical communication with
stakeholders
Co-produced by making and keeping
promises
Relational norms (perceived as
equitable exchanges)
Dialogical: a bias to learning Finding a voice in co-determination Emergent in
learning
together: co-
created and integrated
Networked (perceived as spontaneity)
Source: Ballantyne and Varey (2006), revised from Varey and Ballantyne (2005)
Branding in B2B markets: the service-dominant logic
David Ballantyne and Robert Aitken
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 363–371
367
memory derived from historical experience, the importance of
the service-ability of goods becomes paramount in sustaining
the life of a brand (in all meanings of the term). All product
experiences and service perceptions meld with brand
associations over time, and this helps to consolidate the
reputation of firms in both their internal (employee) and
external (customer) markets. These dynamical changes also
impact on the perceptions of the wider community of a firm’s
stakeholders.

We are confident in asserting that S-D logic opens up new
branding research opportunities. First, it will demand
renewed rigour and clarity in the use of the term “brand”,
and second, it will open up for consideration a variety of
communicative interaction modes beyond (but including)
advertising and packaging. S-D logic also gives rise to the
practical possibility of experimenting with time-based
customer contact points, and with strategies aligned more
closely to customer value-in-use assessments. Some of these
issues are not new to branding scholars but they currently
compete for attention in the shadow of media-dominant
approaches to branding. These new S-D branding
perspectives seem to us to be amenable to use in a B2B
context.
Implications for practitioners
.
Great customer service is a B2B firm’s principle branding
opportunity. This comes in two forms – direct service
interaction with a buyer company and indirect service
interaction through goods-in-use. Media advertising should
have a useful but support role in brand building in most B2B
companies With S-D logic, the service experience of
customers (direct or indirect) leads in varying degrees to
positive or negative trust in the supplier firm and/or its
goods and services. It follows that judgments of value-in-
use and resultant word-of-mouth effects are the primary
communicative sources of brand awareness and meaning.
Notwithstanding, media advertising over the last 50 years
has carried the weight of brand building, and still does
today. This is the conventional branding logic, even to

some extent for service brands (Berry, 2000, p. 135;
however, see also Berry and Lampo, 2004).
That said, marketing communication can play a varied
and useful support role in any service-oriented brand
development, especially in creating awareness of the
offering, stimulating trial, and providing appropriate
language and imagery to help position a brand in its
market (Berry and Lampo, 2004). But if value-in-use
(experiential) judgments are out of line with media-
mediated messages, customers will place trust in their own
experience and the word-of-mouth of trusted colleagues
and friends.
.
View brand-marks as transitional communicative devices
which over time stimulate brand recognition, reputation and
other meanings associated with the variety of interactions and
exchanges between a firm, its customers and other stakeholders.
B2B marketers in our view should always explore the full
range of branding opportunities from media messages to
explanatory brochures and distinctive packaging through
to communicative interaction in the form of trade fairs
and other forms of dialogical interaction. That said, task
capability seems to be uppermost in buyer consideration in
many industrial markets rather more than developed
product characteristics. That is to say, buyers make
judgments about the future efficiencies, effectiveness, and
networking competencies of various suppliers (Mo¨ller and
To¨rro¨en, 2003). Also, Golfetto and Gibbert (2006) report
in their recent work on “competence-based marketing”
that they found industrial buyers selecting suppliers by

profiling and evaluating supplier resources and
competencies. This process was not limited to marketing
communication and was often initiated by a buyer in a
pre-contractual phase to align supplier competencies with
that buyer’s business processes, and later, with the
supplier and buyer experientially working together to
deliver these competencies to fit the buyer’s business
processes.
This matches well with the S-D logic and its emphasis
on communicative interaction, reciprocal servicing,
resource sharing, solution orientation and the co-
creation of value. Of special interest in the context of
this article, the assessment of brand value is a shifting
process rather than an act, and begins “upstream” with
assessments of the competencies available to the buyer
firm, backed by the reputation of the supplier firm. Any
assessment of defined tangible product characteristics
comes later again. It does seem to us that B2B buyer
behaviour strategy is more akin to a service orientation
than consumer goods. And when the appropriate focus for
branding activity is reflectively considered, it is likely as
not the B2B firm that is brand-marked, rather more than
its products.
.
Explore strategic opportunities for developing or supporting
brand communities using web-based media sites as well as call-
centres and perhaps direct marketing as appropriate to
enhancing knowledge exchange in value-in-use contexts.
Traditionally, industrial markets have not shown much
interest in developing brand communities of the consumer-

based variety, like those of Harley-Davidson and Saab
described by McAlexander et al. (2002) and Muniz and
O’Guinn (2001), respectively. However, the potential
positive impact of encouraging web-based brand
communities in industrial markets could be even greater
than in consumer markets, according to Andersen (2005),
because business and professional users may have a more
committed interest in exchanging product-related
information with the supplier company and amongst
themselves.
.
Develop a strategic branding approach contributing to the cycle
of service episodes experienced by customers. S-D logic offers
opportunities to connect with customers in new ways,
based on the specific use to which goods are put in a
buyer’s value creating processes. This could mean new
dimensions of post-sale service and logistics service
support. The concept of the cycle of service from services
marketing fits well, where the interaction process is
characterised as a sequence of episodes, moments of truth,
or critical incidents (see Albrecht, 1990; Ballantyne et al.,
1995; Carlzon, 1987; Vandermerwe, 1993).
The central S-D logic idea of goods as service
applications means that tracking the service experience
of customers over time and contributing additional service
support is an open-ended opportunity. These ideas are not
new in service industries but are less common in B2B
contexts.
Branding in B2B markets: the service-dominant logic
David Ballantyne and Robert Aitken

Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 363–371
368
.
Co-creation of value under S-D logic enhances opportunities for
co-branding. The relationship between a supplier and a
customer or another stakeholder evolves around a mutual
and reciprocal understanding of where value resides. Value
is mutual when it has benefits for all involved and
reciprocal when value is co-created. S-D logic lends itself
to all forms of value creation through co-operation, such
as through co-design, co-production, co-delivery, and
especially in the context of this article, co-branding. The
opportunity for a more integrated communication
approach is thus broadened and deepened. This in turn
supports the development of an enhanced brand image.
For example, Intel, as an industrial component provider,
has enhanced its brand image through association with
computer hardware manufacturers and assemblers, and
the highly visible placement of its brand mark on their
products.
.
A common view is that branding in consumer markets is based
on emotional appeals while branding in B2B markets is based
on logic and rationality. We recommend testing the validity of
this assumption in specific contexts. Consumer-oriented
firms (such as IBM, Apple, Coca-Cola, and Toyota) use
emotional brand appeals to differentiate and position
themselves uniquely in their markets. Such emotional ties
are thought not to exist in B2B settings. However,

understanding the emotional and cognitive interplay that
impacts on any brand image might be a matter of assessing
the degrees of emotional relevance, rather than assuming
that absolute rationality applies. It is possible to monitor
and track brand image over time in terms of performance
criteria, so we recommend firms test the validity of
assumptions about the emotional appeal of brands in
particular market contexts. The idea that emotion as a
social well-spring can be bracketed out of B2B marketing
decisions seems extreme to us, especially when B2B
marketing logic acknowledges the benefits of social
relationships as a basis for generating trust and
commitment with customers and other stakeholders.
Future directions
S-D logic encourages us to think differently about the fluidity
of brand connections between firms, their B2B customers and
stakeholders, and the excessively constrained communication
logic that may exist in B2B settings. S-D logic also asks us to
break out of the narrow role specifications of marketing
exchange and to explore the untapped potential for co-
creating brand value. Perhaps the most exciting challenge of
the S-D logic is its potential for extending the time-logic of
marketing exchange[4], beyond its still current transactional
straitjacket, in exchanges of service for service, legitimized by
a marketing logic that emphasises communicative interaction,
relationship development and the generation of knowledge
competencies adequate to serve our fast developing post-
industrial society.
Notes
1 The Otago Forum web site is available at: www.business.

otago.ac.nz/Marketing/Events/OtagoForum/
2 This emphasis on value-in-use resonates with pivotal
debates in classical economics as to the comparative utility
of goods and services. For a revealing historical account of
the development of economic thought around these
themes, see Vargo and Morgan (2005). Tangible goods
of course won out as the dominant logic. See also an earlier
historical review by Ramirez (1998) which emphasises a
value co-production framework at variance with that
commonly associated with industrial production.
3 Dialogue is not given any depth of treatment in the
original S-D logic thesis, although there are supportive
references (Vargo and Lusch, 2004a, pp. 13-14). For a
fuller treatment of the application of dialogue in various
marketing contexts, see Ballantyne (2004a, b), Varey
(2002), and Varey and Ballantyne (2005).
4 For a perceptive commentary on how marketing
interaction works in time, see Medlin (2004).
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Branding in B2B markets: the service-dominant logic
David Ballantyne and Robert Aitken
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 363–371
370
Vargo, S.L. and Lusch, R.F. (2004a), “Evolving to a new
dominant logic for marketing”, Journal of Marketing, Vol. 68
No. 1, pp. 1-17.
Vargo, S.L. and Lusch, R.F. (2004b), “The four service
marketing myths: remnants of a goods-based
manufacturing model”, Journal of Service Research, Vol. 6
No. 4, pp. 324-35.
Vargo, S.L. and Morgan, F.W. (2005), “Services in society
and academic thought: an historical analysis”, Journal of

Macromarketing, Vol. 25 No. 1, pp. 42-53.
Wilson, R.M.S., Gilligan, C. and Pearson, D.J. (1995),
Strategic Marketing Management, Butterworth-Heinemann,
Oxford.
Further reading
Christopher, M., Payne, A. and Ballantyne, D. (2002),
Relationship Marketing: Creating Stakeholder Value, 2nd ed.,
Butterworth-Heinemann, Oxford.
Dixon, N. (1998), Dialogue at Work, Lemos and Crane,
London.
Gummesson, E. (2002), Total Relationship Marketing, 2nd ed.,
Butterworth-Heinemann, Oxford.
Nonaka, I. and Takeuchi, H. (1995), The Knowledge Creating
Company: How Japanese Companies Create the Dynamics of
Innovation, Oxford University Press, New York, NY.
Storbacka, K. and Lehtinen, J.R. (2001), Customer
Relationship Management: Creating Competitive Advantage
through Win-win Relationship Strategies, McGraw-Hill,
Singapore.
Wikstrom, S. and Normann, R. (Eds) (1994), Knowledge and
Value: A New Perspective on Corporate Transformation,
Routledge, London.
About the authors
David Ballantyne is an Associate Professor of Marketing at
the University of Otago in New Zealand and an International
Fellow at the Centre for Relationship Marketing and Service
Management, Hanken Swedish School of Economics in
Helsinki. He was convener of the first wide-ranging
international dialogue on S-D logic, The Otago Forum,
held at the University of Otago in November, 2005. He is also

a co-author with Martin Christopher and Adrian Payne of
Relationship Marketing: Bringing Quality, Customer Service and
Marketing Together (1991), the first text published
internationally in this field of marketing inquiry. A second
edition was published in 2002 as Relationship Marketing:
Creating Stakeholder Value. David Ballantyne is the
corresponding author and can be contacted at:

Robert Aitken is a Lecturer in the Department of
Marketing at the University of Otago. His academic and
research interests include advertising, consumer behaviour,
teaching and learning, communications and the media. He is
lead author of the Marketing Theory 2006 special issue
“Service-dominant logic of marketing: insights from The
Otago Forum”. He is a constructivist who is interested in how
people make sense of the world and an idealist in wanting to
know how we can make it a better place.
Branding in B2B markets: the service-dominant logic
David Ballantyne and Robert Aitken
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 363–371
371
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Branding implications of partner firm-focal firm
relationships in business-to-business service
networks
Felicia Morgan, Dawn Deeter-Schmelz and Christopher R. Moberg
Ohio University, Athens, Ohio, USA
Abstract

Purpose – By outsourcing or partnering with two or more firms to perform certain activities targeted toward customers, firms are engaging in service
networks. This research begins to examine how customers evaluate firms in a strategic, B2B service network and how their assessment of firms
involved in co-producing after-sales service affects their evaluations of a focal selling firm. These evaluations include the key relational outcomes of
brand image, satisfaction, and behavioral intentions.
Design/methodology/approach – The conceptual model examines the effects of partner firm performance on customers’ evaluations of a focal
selling firm. Key factors such as focal brand strength and the strength of the relationship between the partner firm and the focal selling firm are
proposed to influence this relationship.
Findings – Post-sale business services provided directly to the customer are likely to play an important role in building a firm’s brand image and equity,
whether those services are provided by the firm or its partners.
Research limitations/implications – The individual firm to individual customer dyad approach that currently dominates the literature does not
adequately capture the complex nature of today’s B2B service relationships. This research develops a conceptual model that directly addresses the way
customers evaluate service when it is performed by multiple partners.
Practical implications – Discovering how customers evaluate service experiences in which multiple firms co-produce the service within a B2B service
network can provide firms with the guidance needed to improve the performance of the entire network and the overall service experience of network
customers.
Originality/value – This paper presents new theoretical developments in the area of business-to-business service networks. This research also
addresses several gaps in the industrial marketing literature, particularly B2B services and branding.
Keywords Service industries, Networking, Business-to-business marketing, Brands
Paper type Research paper
An executive summary for managers and executive
readers can be found at the end of this issue.
Introduction
One important recent development in the marketing literature
has been the application of the network paradigm to the study
of service provider relationships with customers. Because
service providers often work with other firms to meet the ever-
increasing expectations of customers, the complexity of
relationships is increasing. Utilizing the individual firm to
individual customer dyad approach that currently dominates
the literature does not adequately capture the complex nature

of today’s service relationships. Researchers need to examine
the relationship between customers and “service networks”,
where two or more entities jointly provide a service experience
to a customer, for two main reasons. First, discovering how
customers evaluate service experiences in which multiple
firms co-produce the service can provide firms with the
guidance needed to improve the performance of the entire
network and the overall service experience of network
customers (Morgan and Tax, 2004; Morgan, 2004).
Second, consumers’ perceptions of services co-produced by
multiple providers can have important branding implications,
for service delivered by a third party can affect the brand
strength and/or image of the focal firm (Ahluwalia et al., 2000;
Dube and Maute, 1998; Simonin and Ruth, 1998).
Early research on service networks has focused on business-
to-con sumer (B2C) r elationships. For example, Morgan
(2004) examined how consumers evaluated service providers
involved in having a car repaired after a minor accident. In that
study, the service network consisted of a focal firm (an
automobile insurance company), and two partner firms, (a
repair shop and a rental car firm). Morgan’s study (2004)
strongly suggests that, in service network contexts, partner firm
performance is a key influence on consumer evaluations of the
focal firm, including the focal firm’s brand strength and image.
Specifically, the results indicated that partner fir m
performance, the strength of the focal brand (the insurance
company), and the perceived strength of the relationships
between the focal firm and its partner firms all significantly
influence consumers’ evaluations of the focal brand’s image
during a service network experience.

While examining consumer evaluations of service networks
is valuable, there are business-to-business (B2B) contexts
where service networks are common, even when tangible
The curr ent issue and full text archive of this journal is available at
www.emeraldinsight.com/0885-8624.htm
Journal of Business & Industrial Marketing
22/6 (2007) 372– 382
q Emerald Group Publishing Limited [ISSN 0885-8624]
[DOI 10.1108/08858620710780136]
372
goods are sold. We argue that critical differences between
B2C and B2B service networks exist. Consider, for example, a
customer purchasing a computer. In a B2C context a
consumer may interact one-on-one with a provider such as
Dell to purchase a single computer. Subsequent interactions
with third-party providers might include a shipping firm such
as UPS and after-sales service. Alternatively, in a B2B
environment the process is more complex. The selling firm
may work with multiple members of a buying center rather
than a single customer. Once a buyer and seller have entered
into an arrangement, customer satisfaction largely depends on
the service provided after the purchase or during the term of
the contract. Much of the B2B buyer’s evaluation will be
related to logistics and customer service activities such as
warehousing, order fulfillment, order tracking, delivering the
right product at the right time, smooth installation, and
accurate billing (Dwyer and Tanner, 2002; Moberg and Speh,
2004; Rogers and Daugherty, 1995; Sheffi, 1990). Product
support in the forms of general service, warranties, provision
of spare parts, expert assistance, online assistance, and field

service is also more critical in a B2B environment in which
customers are dependent on suppliers to deliver the services
needed to operate (Kumar and Kumar, 2004). The increased
complexity of this process highlights time as a potential
difference between B2C and B2B, i.e. the total time for
delivering a co-produced B2B service is likely to be longer
than that for delivering a co-produced service in a consumer
setting. Given these key differences, we argue that research
examining B2B service networks is warranted.
The previous review highlights the practical differences
between service networks in B2C versus B2B settings.
However, these are not the only differences worth exploring;
key theoretical differences may also exist. For consumers, the
notion of network coheres around an “experience”. The
primary question is whether the service network experience
will cohere in a B2B context: will the buying firm perceive the
network as a whole and interpret the co-produced service as a
single process representative of a single brand? Or will the
industrial buying firm recognize outsourced processes as
representative of separate brands? One can imagine a situation
in which a retailer purchases a manufacturer’s product from a
distributor and receives that product from a third-party
transportation firm. Does the retail buyer interpret this
purchase as an experience or as a series of separate activities
provided by separate firms? Research examining these ideas is
needed to assist manufacturers as they build relationships
with partner firms and develop and implement branding
strategies. The dearth of studies exploring branding from an
industrial marketing perspective underscores the need for
theoretical development in this area (Lynch and de

Chernatony, 2004).
Based on the scarcity of research on service networks and the
need to examine the impact of service networks on customer-
firm relationships, including branding implications, the major
goal of this research is to conceptualize how customers evaluate
firms in a B2B ser vice network and how their assessment of the
firms co-producing the after-sales ser vice affects their
evaluation of the focal (selling) firm. In the following sections
we discuss service networks, service processes and experiences,
and the role of brand image in a service network. Next, we
explore service networks and branding in a B2B context and
offer research propositions. We end with a discussion of
implications for researchers and practitioners.
Conceptual perspectives
Service networks
The seminal concepts that form the very core of services
marketing are all dyadic in nature: the service encounter
(Shostack, 1985), service quality (e.g. Parasuraman et al.,
1985), service recovery (Tax et al., 1998). Yet in many
instances customers do not interact with individual firms in
isolation. Rather, for any given situation, the process and
outcomes of customer interactions with a service or company
maybeshapedbymultipleentities. Ever-increasing
specialization, or microspecialization, in the marketplace is
creating interdependence among providers, collaborators, and
customers and more indirect forms of exchange (Vargo and
Lusch, 2004). The evolution of service provision toward
multiple providers calls for transitioning from the traditional
focus on the customer-firm dyad to a focus on service
networks. Further, while all firms must learn to manage their

network relationships, firms that outsource customer-contact
activities to network partners face the challenge of managing
customer relationships “once-removed”. An important yet
overlooked issue in services marketing is the assessment of the
reciprocal impact of the performance of members of a service
network on customer relationships with and evaluations of
each firm within a network (Morgan and Tax, 2004). Some
researchers have made inroads into developing conceptual
frameworks and theories to promote a better understanding of
networks (cf. Ritter and Gemunden, 2003), yet with few
exceptions (e.g. Gittell, 2002; Singh, 1991), we have not
addressed the way customers evaluate a service when it is
performed by multiple partners.
The service network has been defined as “two or more
entities connected formally or informally which directly
provide a range of resources and activities that create value
and help customers solve short- or long-term problems”
(Morgan and Tax, 2004). The keys to this definition are:
.
each entity in the network performs service activities that
work in combination with other firms’ ser vice activities;
and
.
each entity in the network interacts directly with
customers.
We focus on direct interactions with customers because many
services are produced and consumed at the same time. The
quality of service and customer evaluations are dependent on
what happens in “real time” when ser vice-producing
employees play a role as part of the product itself and as an

essential ingredient of the experience for the customer
(Zeithaml and Bitner, 2003).
Service networks can take on a variety of structural forms;
however, because we are exploring the effects of partner
performance on customer evaluations of a focal firm within a
service network, the issue of centrality is of primary interest.
Centrality refers to the occupation of a centrally positioned
and powerful node within the network with linkages to all
other network members (cf. Brass and Burkhardt, 1992).
Centrality is most evident in “firm-centric networks” (cf.
Brass and Burkhardt, 1992) that may be of a “fan-” or “star-
shaped” structure and are comprised of a focal firm, all the
firms to which it is connected, and the interconnections
thereby implied. Jarillo (1988) conceptualized a network with
such a “hub firm” that sets up the network and takes a pro-
active stance in the care of it as a strategic network. This type of
network is the focus of this paper. An example of a strategic
Branding implications of partner firm-focal firm relationships
Felicia Morgan et al.
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 372 – 382
373
B2B service network is shown in Figure 1. The solid lines in
Figure 1 indicate that the focal firm has a relationship with
each of the partner firms; the dotted lines are representative of
direct customer contact.
Service processes and experiences
The service delivery process has been studied in terms of
discrete units of analysis, usually based upon the number and
scope of interactions (Gro¨ nroos, 2000). There is a general

understanding of these concepts; however, terminology has
not been consistent in the literature. In the interests of clarity,
we refer to the smallest unit of analysis in the interaction
process as an “encounter”, or a single customer contact with a
service provider. A typical B2C encounter is dropping clothes
off at the cleaners; accepting a delivery of new equipment is
representative of a B2B encounter. An “episode” is a series of
related encounters (e.g. Liljander and Strandvik, 1995) and is
associated with the firm level of analysis. Examples include
dinner at a restaurant (B2C) and hosting an employee
training session (B2B).
An “experience” consists of all service encounters and
episodes related within a common time period, project, event,
or combination of these (Gro¨nroos, 2000). An example of a
B2C experience is a night on the town, including episodes of
riding in a taxi, dining at a restaurant, and attending the
theater. A B2B service experience might entail the entire
process of procuring a new database management software
package, including episodes of ordering, delivery, installation,
training, and maintenance. It is important to note that
ultimately, the boundaries of an experience are subject to the
interpretation of the customer – that is, the experience starts
and ends when the customer perceives it does. According to
Padgett and Allen (1997, p. 52), a service experience is a
“time-bounded progression of events beginning with the
identification of service consumption as a distinct situation
and ending with the resolution of the situation”. They suggest
that an experience begins when the consumer defines a
situation in response to a given need and begins activity (i.e.
thoughts, feelings, and behaviors) related to addressing the

need. The experience concludes when the functional and
emotional outcomes of the service are realized. Pragmatically,
we can assume logical starting and ending points of an
experience for many everyday services, but without asking
each customer specifically, we are confined to the limitations
of the assumption. Thus, when examining service network
experiences (as was the case in Morgan, 2004), a key implicit
hypothesis is that the customer perceives the network as a
whole and interprets the service co-production by multiple
members as a single process, under the aegis of the focal
brand. Although Morgan (2004) found support for this
hypothesis in a B2C context, it remains to be seen whether
the holistic service network “experience” will remain a viable
unit of analysis in a B2B setting.
Brand image in a service network context
A brand is a multidimensional construct linking the value-
creating activities of suppliers with perceptions in customers’
minds (de Chernatony and Dall’Olmo Riley, 1999). For
branding strategies to be successful, and brand equity to be
created, customer s must perceive that there are meaningful
differences among brands in the product or service categor y.
Establishing a high level of brand awareness and positive
brand image in memory produces the knowledge structures
that can affect the customer response and produce customer-
based brand equity (Keller, 1998). The strength, favorability,
and uniqueness of the associations that comprise brand image
play a critical role in determining the customer response
differential. Thus, it is brand image that is primarily
responsible for brand differentiation.
Service brand image is the customer’s “mental picture of

the brand created in response to brand related stimuli”
(Padgett and Allen, 1997, p. 50). Because of the intangible
nature of services, building and managing service brand image
requires an understanding of how customers make sense of
services, or create and attach self-relevant meanings to service
experiences. There are more points at which customers
interact with services brands (versus goods brands) and the
experience is more strongly influenced by employees (e.g.
Burmann and Zeplin, 2005), which can result in g reater
variability. An important goal for brand managers is to achieve
brand differentiation while maintaining a consistent brand
experience across “brand touchpoints”. A “brand
touchpoint”, also known as a “brand contact”, is defined as
any information-bearing experience that a customer or
stakeholder has with a brand (Schultz et al., 1993). Brand
touchpoints include the company’s controlled
communications of the brand’s purpose and identity, the
core elements of the brand such as logos, symbols, and
advertising tag lines (i.e. the “presented brand”; Berry, 2000),
encounters with service-producing employees of the firm, and
external brand information essentially uncontrolled by the
company, including word of mouth messages (Schultz et al.,
1993) and the behaviors of distributors and agents (Duncan
and Moriarty, 1998). Because a brand is essentially the sum of
its touchpoints, direct and indirect, explicit and hidden
Figure 1 Strategic or “firm-centric” business-to-business service
network
Branding implications of partner firm-focal firm relationships
Felicia Morgan et al.
Journal of Business & Industrial Marketing

Volume 22 · Number 6 · 2007 · 372 – 382
374
communication dime nsions must all be recognized and
accounted for by managers in order to achieve a consistent
brand message (e.g. de Chernatony and Dall’Olmo Riley,
1999, Duncan and Moriarty, 1998). However, this task takes
on new levels of complexity when critical service components
are delivered by employees of network partners, or in other
words, are outsourced (Burmann and Zeplin, 2005).
An increasing number of researchers and practitioners seem
to agree that it is at least as important for the employees of an
organization to understand the concept and values associated
with the brand as it is for customers (e.g. Berry, 2000; Ind,
2003; Mitchell, 2002). For service organizations, internal
branding, or the process of gaining employees’ intellectual and
emotional buy-in to the brand, is an especially relevant means
of driving brand and business performance (Thompson et al.,
1999). This is primarily due to the fact that for many services,
it is employees who create the brand experience for
customers. According to Berry (2000), the primary source
of brand meaning for customers who have actually
experienced a service is the experience itself. Thus, the
brand is created and recreated for customers at every service
encounter. Because the customer-brand experience is driven
by all employees who contribute to the brand’s products,
services, and communications, all employees need to be
familiar with the company’s presented brand concepts and
strategies, and be committed to “live” the brand both inside
the organization and out (Burmann and Zeplin, 2005).
However, Berry (2000) emphasizes that for services firms,

customer-contact personnel are the primary medium through
which brand image and equity are built; thus, without a
connection to and understanding of the brand, these
employees can most easily undermine advertising-driven
expectations with inappropriate words or behavior (Mitchell,
2002). Contact employees can make the brand come alive
only by representing the beliefs, attitudes, and behaviors
associated with the brand in such a way that customers
perceive a consistent message across the whole range of
services provided (de Chernatony and Dall’Olmo Riley,
1999). Berry and Parasuraman (1991, p. 129) recommend
that firms adopt the practice of internalizing the brand, which
involves “explaining and selling the brand to employees [ ]
training employees in brand-strengthening behaviors [ ]
rewarding and celebrating employees whose actions support
the brand”.
Although we may conclude that customer-contact
employees are the primary medium through which service
brand image and equity are built (Berry, 2000), and thus
internal branding is especially critical for services firms, it is
inherently difficult to apply “internal” branding philosophies
and tactics to service experiences that span two or more
organizations. When important components of a total service
experience are delivered by the employees of another firm,
how can the objectives of internal branding – namely the
intellectual and emotional buy-in of employees – be achieved?
There are implications for selecting, managing , and
maintaining relationships with service network partners that
have similar cultures and a willingness to cooperate and
coordinate activities toward achievement of superordinate, or

network goals (Bucklin and Sengupta, 1993). Because of the
intrinsically difficult nature of managing the activities of
service providers not under the organization’s direct control,
the service network context represents unique challenges for
managers. A service organization must not only be aware of
the potential effects of network partner activities on the
organization’s own brand image, the organization must
manage and attempt to leverage these effects to ensure
brand differentiation among competitors and consistent and
favorable service brand image in customers’ minds.
B2B service networks and branding
A review of the services literature reveals that research on
service networks is in its infancy and focuses on the impact of
service networks on customer perceptions only in traditional
B2C environments (e.g. Morgan, 2004; Morgan and Tax,
2004). In the B2B and industrial marketing literature, the
increasing existence and importance of networks to business
marketers has been recognized (e.g. Gummesson, 2004;
Coviello et al., 1997). However, much of the research on
critical B2B concepts and theories, such as customer
relationship management and supply chain management,
ignores the network perspective and continues to focus on
customer-supplier dyads (e.g. Gummesson, 2004; Moberg
et al., 2003). The proposed examination of the branding
impact of service networks on focal firms in B2B
environments can add to both the services and B2B
literature domains because it considers simultaneously the
potential effects of the multiple brand relationships within the
network, rather than adopts a dyadic perspective.
While research on branding in B2B service networks is

lacking, researchers have begun to examine service quality,
customer evaluations of service, and branding from an
industrial perspective. Bolton et al. (2003) have taken an
important first step in studying customer ser vice evaluations
by business customers, finding that both the functional and
technical qualities of service delivery influenced business
customer evaluations. In another study, van Birgelen et al.
(2002) used a sample of international customers of a
multinational office equipment manager to study the effects
of national culture characteristics on buyers’ evaluations of
face-to-face versus technology-infused service delivery. Lin
et al. (2005) conducted an in-depth investigation of the
service quality of after-sales service information in the
Taiwanese machine tool industr y, albeit from the
manufacturers’ perspective. These studies, along with
several others, highlight a key point: the competitive
advantage for most B2B firms lies in the added value
associated with superior service rather than in the elements of
the marketing mix (Bolton et al., 2003; Donath, 2001; Lele
and Sheth, 1987; Loomba, 1998). Good service drives
customer satisfaction, promotes customer loyalty, and thus is
a key defensive marketing strategy (Berry, 1995). Indeed,
research has provided evidence of a link between service and
the long-term financial performance of industrial service firms
(Kumar, 1999). Still, little is known about the influence of
service on the satisfaction and loyalty behaviors of business
customers.
Although in recent years more attention has been focused
on B2B branding, it nevertheless represents another under-
researched construct in the industrial marketing literature

(Lynch and de Chernatony, 2004). Yet industrial firms
increasingly are turning to branding to differentiate their
products and/or services (Shipley and Howard, 1993). As
argued by Lynch and de Chernatony (2004), the clusters of
functional and emotional values that comprise a brand
promise the buyer a unique, positive exper ience, whether that
buyer be operating in a B2B or B2C environment. In support
Branding implications of partner firm-focal firm relationships
Felicia Morgan et al.
Journal of Business & Industrial Marketing
Volume 22 · Number 6 · 2007 · 372 – 382
375
of this premise, Mudambi (2002) found that industrial buyers
consider branding in their purchase decision, although the
importance of branding varies by buyer and purchase
situation. Sweeney (2002) reported that business brands
played a critical influencing role during four stages of the
purchasing decision process, including the development of the
supplier list, the shortlist of firms for negotiation, signing the
purchase agreement, and deciding on supply and support
services. These findings suggest that branding can play an
important role in the B2B purchasing process.
Some researchers have argued that B2B brands go further
than B2C brands by creating ties with other stakeholders,
including channel intermediaries and employees, as well as
customers (Lynch and de Chernatony, 2004; APQC
International Benchmarking Clear inghouse, 2001). In
essence, the brand is the sum of all customer interactions
with the company, which in the industrial environment can
include billing, promotions, salespeople, product

demonstrations, trade shows, as well as after-sales support
ser vices (Smith, 2004). Impor tantly, these intera ctions
between the customer and the firm are equivalent to the
brand touchpoints discussed previously. By outsourcing or
partnering with two or more firms to perform certain activities
targeted toward customers, B2B firms are engaging in service
networks.
Proposed model
The fundamental premise of this study is that customers’
experiences with partner firms within a strategic B2B service
network will affect their evaluations of the focal firm. This is
the main relationship of interest in this study and it is depicted
in Figure 2 with a horizontal arrow from the independent
variable (i.e. partner fir m performance), to the dependent
variable (i.e. customer evaluations of focal firm). These
customer evaluations include key relational outcomes such as
the brand image of the focal firm (i.e. brand meaning; Berry,
2000), satisfaction with the focal firm, and behavioral
intentions toward the focal fir m. Because customer
perspectives on networked organizations have been scarcely
studied, we have chosen to focus pr imarily on the
independent variable (i.e. partner firm performance) and its
relationship with customer evaluations of the focal firm. For
the purposes of this study, we consider other variables only in
their capacity as moderators of this relationship. The other
variables of interest are the key factors proposed to influence
the manner in which experiences with partner firms in the
network affect customer evaluations of the focal fir m. These
situational or “context” factors include the strength of the
relationship between the focal firm and the customer, focal

brand strength, the importance or “criticality” of the partner’s
service within a particular service network context, and the
strength of the relationship between the focal firm and the
partner firm. Two of these variables – focal brand strength
and focal firm-partner firm relationship strength – have been
shown to influence the extent to which partner episodes
impact a focal firm’s brand image in a consumer setting
(Morgan, 2004).
A moderator-oriented approach to this research is
appropriate for several reasons. First, according to Baron
and Kenny (1986), moderator research is typical when there
is a strong focus on a particular predictor variable. Our
primary interest is in developing theory relevant to the
independent variable, partner firm perfor mance, and its
effects on customer evaluations of the focal firm. Second,
although the potential for mediation exists among some of the
variables in the proposed model, this remains an empirical
issue for future study; at this stage, the independent variable,
partner firm performance, is not conceptualized as causally
antecedent to any of the other exogenous variables. Finally,
the relationship between partner firm performance and
customer evaluations of the focal firm has potentially critical
managerial implications for the focal firm, but of course, the
focal firm has little control over partner actions. Thus,
information about actionab le (i.e. controllable) factor s
moderating this relationship will be of high value to
practitioners and managers who are actively engaged in
partnerships and service network alliances.
Figure 2 Proposed model
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Felicia Morgan et al.
Journal of Business & Industrial Marketing
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376