Summary
The purpose of this paper is to create a guideline to how FiberAcoustic can brand themselves most successfully in the market of sound absorption. A market in which they have not yet operated within. However, it will also be questioned if branding even works in a business-to-business environment and if yes, how this is done the best way.
To do this, knowledge about the complications and opportunities of introducing a new product to a new market must be obtained. By use of Ansoff¨s Market Expansion Grid, it was learned that FiberAcoustic could use knowledge from other product line brands concerning the production of the material and knowledge about target audience. However, it is important that they differentiate themselves from the rest of the organization in order not to cause damage to both the product line brand (FiberAcoustic) and the range brand (Fibertex).
Since FiberAcoustic are under pressure from competing brands with different solutions, they should be sure to differentiate themselves from the rest of the market. One way of doing this is through branding. The thesis found vast agreement among professors that branding is effective, also in a business-to-business environment. However, the branding should be more rational and more emphasis should be put on technical aspects than in the case of branding in business-to-customer environments.
When deciding what solution should be used for sound absorption, two different target groups are of equally importance: The architects and the engineers. Together, they find a product that can deliver a result they both find acceptable. This thesis targets architects, but further research needs to be done in order to target the engineers. The architects are found to want extended knowledge about the products they are using and want them to be flexible and functional so they can be more creative. These values are therefore important when FiberAcoustic is defining their identity through branding. Through Aakers Brand Identity Planning Model it was learned that FiberAcoustic should brand themselves through the perspective of “brand as product”, putting emphasis on the product features since architects wants extended knowledge about the products they are using. Furthermore, the product features of the FiberAcoustic material match the abilities architects are looking for in a product and it is, therefore, important to communicate this. To avoid the product fixation trap, FiberAcoustic should, furthermore, brand themselves through the perspective “brand as person”. This way, the architects will be more likely to associate with the organization and this can create a strong brand-customer relationship. Lastly, FiberAcoustic should find a symbol that expresses sound or sound absorption to assure a better recall and recognition. The branding was found to be most successful if it expressed the product functionality as its core identity and creativity and flexibility as the extended identity. If these criteria are met, the thesis believes FiberAcoustic will create a successful brand because the architects would perceive them communicating values that match their needs and wants.
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Table of Content
1. Introduction
1.1 Problem Statement
1.2 Theoretical Framework
1.3 Introducing a New Product to a New Market
1.4 Methodology
1.5 Delimitations
1.6 Structure
2. Background
2.1 Fibertex
2.2 FiberAcoustics
3 Theoretical Explanation of Branding
3.1 Definition of branding
3.2 Brand Equity
3.3 Brand Identity
3.4 Branding in Business-to-Business
3.5 Critique of Branding
3.6 Part-Conclusion
4 Brand Identity Planning Model
4.2 Brand Identity System
4.3 Brand Identity Structure
4.4 Part-Conclusion
5. Conclusion
6. Bibliography
Appendix 1
Appendix 2
Appendix 3
Appendix 4
1. Introduction
Fibertex is through FiberAcoustics moving into a new market with a new product. The target customers in this market are assumed to be unaware of the product as it is so new that it has only been tested by the company theoretically and has not yet used in constructions (Appendix 1). The target audience has, therefore, no knowledge of the new product or the company behind it. If FiberAcoustics does not succeed in making their target audience aware of them and convince the potential customers to buy their product, their survival will be questionable. The thesis will through branding try to solve this problem. But does branding even work in a business-to-business environment (B2B)? And if yes, does it differ from branding in a business-to-customer environment (B2C)?
Because Fibertex' customers has very diffused preferences, (Kotler 334) all from gardening and beds to construction and windmills, they have segmented their brand to appeal to the different, specific customer preferences. This rapport will focus on the area of the company called “FiberAcoustics” that produces a fabric used in sound absorption.
When a company is moving into a new market with a new product, the potential customers will not automatically link the name of the company with a product they would need and sometimes they haven't even heard of the company or their products before. According to Aaker, this problem can be solved by creating brand equity (Building 8). By adding a certain value to a brand name and symbol, the potential customers can be targeted, and hopefully convinced, to buy the product. Furthermore, the customers will be made aware of the brand and be familiar with the qualities and values it posses (Aaker Building 8). This makes branding a helpful tool when expanding into a new market.
This assignment will create an understanding of the development of branding in the recent years and through a theoretical approach explain how FiberAcoustics can communicate values appealing to their customers in the market of sound absorption. This will make it possible to convince them that the abilities of their product are favorable in the new market and that the customers should choose them in front of their competitors.
Klaus Brøndum, the sales manager of FiberAcoustic,informedthat architects are the decision maker when sound absorption is chosen for a construction and they will, therefore, be seen as the key customer of this thesis (Appendix 1).
A set of guidelines will be developed on how to design a brand strategy that will target the right customers from loading the brand with the right values and from these considerations create a strong brand. Based on that, the following problem statement has been derived.
1.1 Problem Statement
“Introducing a newproduct into an old market, how can FiberAcoustics, in a business-to-business marketplace, target their potential customers most efficiently through branding, taking into account their current market situation”
To answer the problem statement a brand strategy will be developed. Kotler et al define brand strategies as having a brand vision that clearly communicates the values of a brand (429). Furthermore, four important issues are raised: “Ensure identification of the brand with customers, and an association of the brand in the customers minds”, “firmly establish the brand meaning in the minds of the customers (by strategically linking a host of tangible and intangible brand associations)”, “elicit the proper customer responses to the brand identity and brand meaning”, “convert brand response to create an intense, active loyalty relationship between the customer and the brand” (Kotler et at 429).
The thesis, therefore, needs to obtain knowledge about: 1) what complications are involved when introducing a new product into a new market?, 2) the current market situation of FiberAcoustic, 3) what is effective branding in a B2B environment?, 4) who should the branding be directed towards?, 5) what values are preferred by the potential customers? 6) how to build a strong brand in the specific case of FiberAcoustic.
1.2 Theoretical Framework
To answer the problem statement, a number of different theories and subjects within the area of business will be taken into account to give the most nuanced and comprehensive thesis. The different areas of interests and the theories linked to them will be described below.
1.2.1 Branding
The most important theoretical field of this thesis is branding. It is, therefore, essential that an extensive theory is chosen to secure the validity of the conclusions. Because of the many opinions on what branding actually is, different definitions will be considered and discussed later in the thesis from views of Kotler et al, Kapferer, Keller and McDonald and Chernatony. From the discussion, the following definition was chosen: ”Brands are valuable to organizations and customers. Their wealth generating capabilities results from the way organizations seek to add value to customers’ lives. Essentially, brands are clusters of functional and emotional values” (Martisiute 7). Based on this definition, Aaker's Brand Identity Planning Model from the book “Building Strong Brands” has been chosen as it considers both the company, its customers and competitors and considers “values” as the basis of a strong brand. Aaker is highly respected within the field of branding with a number of honors, over 100 articles and 14 published books within the field of business (Facultybio). However, the model is made in 1996 and the possibility of the model to be outdated must therefore be considered. It is, therefore, necessary to back up the findings from this model with literature of more recent date. Furthermore, the model mentions the importance of a customer analysis, competitor analysis and a self-analysis, but does not provide the adequate tools, which is why other theories are needed to support Aakers model. These will be described below.
1.2.2 Customer Segmentation
Without a broad understanding of their customers, FiberAcoustic will not be able to build a strong brand, because they would not know who to target and how to target them. Kotler, Keller, Brady, Goodman and Hansen – all respected professors within the field of business (Kotler et al Intro pages) suggest an analysis based on demographics (age, family size, income, education etc.), geographic (country, region, city etc.), psychographic (opinions, lifestyle, interests etc.) and behavioral segmentation (knowledge of, attitude towards, use of and response to a product) (Kotler et al 341). This theory, however, is challenged by Lara Moroko (lecturer at Australian School of Business) (Zoominfo) and Mark D. Uncles (professor of marketing, School of Marketing, University of New South Wales) (Emerald) who argues that this kind of segmentation is inadequate within the field of B2B andsuggests the “segmentation-targeting-positioning” segmentation (182) that takes into account the firm and the product as well as the customer. Because of the fact that themodel is made directly for a B2B environment and the critique of Kotler et el, this theory will be used to segment the customers of FiberAcoustic.
A customer segmentation will increase the chance of finding the right value to load the brand with and thereby create a strong brand-customer relationship and a strong brand (Aaker Brand It 17).
1.2.3 External Environment
Part of Aaker's Brand Identity Model is a competitor analysis. To get a broader understanding of the market Fibertex is currently operating within, this thesis will carry out a more extensive analysis of the external environment to get a full picture of the market situation of FiberAcoustic. One way of analyzing competitors is proposed by Wenpin Tsai, Kuo-Hsien Su and Ming-Jer Chen. They suggest a “rival-centric” (Tsai, Su and Chen 763) approach that enables a company see through the eyes of the competitors and thereby understand their moves, strength and weaknesses (Tsai, Su and Chen 763). However, since the thesis will only apply one theory for the analysis, it must be more extensive and entail a variety of aspects. For this purpose, Porter's Five Forces will be used (Cravens and Piercy 63). Porter has been criticized of having inconsistent logical argumentation and lack of empirical support (Aktouf 92), but will nonetheless be considered a valid source because of the otherwise widespread recognition of his work and his status as Harvard University Professor (Harvard).
1.3 Introducing a New Product to a New Market
To understand the challenges FiberAcoustic is facing when introducing a new product to a new market, the thesis will rely on Ansoff's Market Expansion Grid. This will provide a deeper understanding of how to act in the market situation and how to treat customers, competitors and will be used together with Aaker, Kotler and Porter et al to give the best advice on how to brand FiberAcoustic. Without this model, the final conclusion would lack important information about the possible traps FiberAcoustic could run into when introducing their new product and miss possible opportunities this market expansion might have.
Ansoff is often referred to as the “Farther of Modern Strategic Thinking” (Economist), and is working a professor in strategic marketing and as a marketing consultant. His work includes “New Corporate Strategy” and “Implanting Strategic Management” (Bizhandbook).However, the model was described in the book “Corporate Strategy” from 1965 (Ansoff) and the relevancy of the model must therefore be questioned. For that reason, Tony Proctor's interpretation from 2000 will be used as frame.
1.4 Methodology
Methodological and philosophical hermeneutics, within the social sciences, deal with the social world. The two traditions differ in where they look for meaning. Methodological hermeneutics finds meaning in the relationship between text and sender (Palmer and Richard 84). Gardamar, who perceives the reader as active questioned this theory. When looking for the meaning in a text, he believes that it must be found between the text and the receiver (Skinner and Quentin 25). The readers produce meanings from the text, based on their individual horizon of understanding. Because of this, it is important to understand the customers before a branding strategy can be formed. This view is shared by Aaker, who includes analysis of customers and competitors in his Brand Identity Planning Model (Building 79). This thesis will, therefore, be build up around the notion that meaning shall be found between the text and the receiver and that the world consists of meaning derived by the customers. The challenge will then be to have the reader perceive meaning that will have a positive effect on how they view FiberAcoustics. The same approach will be used doing qualitative research in the form of interviews where the method makes it possible to be open for unexpected or unfamiliar responses in the effort of making sense of the situation (Vandermause and Flemming 369). The interviewer and the interviewee co-create the meaning that must then be interpreted using the hermeneutic circle and through these interviews try to understand the social world of the target audience of the brand strategy (Vandermause and Flemming 372). First, an interview with the sales manager of FiberAcoustic will be conducted in order to learn about the product and organization. The second interview with an architect was done through phone and used in the customer analysis and has the purpose of enlightening how the target audience choose a solution of sound absorption and what values and needs they might have. The interviewer took notes and later transcribed the interview. The last interview was done face to face using same approach.
1.5 Delimitations
The thesis will exclusively focus on a brand related solution and not a complete marketing strategy, furthermore, it will leave out implementation, and it will not carry out a reception analysis to check whether the suggested approach to promote FiberAcoustics has actually worked in terms of short termed and long termed effects (Windahl, Signitzer and Olsen 239). The thesis will, therefore, devolve on a vast base of theory to ensure its validity. How the actual campaign and physical product should look like will also not be included in this assignment. Furthermore, customer analysis, competitor analysis and self-analysis will be limited to using only one theory each. Further research should go deeper into the three categories.
FiberAcoustic is currently selling their product in Denmark and Sweden and using this as a test before moving into more European countries within the next six months. The thesis will, therefore, concentrate on the Danish market. Furthermore, each of these countries would require a different segmentation analysis and variations in the brand strategy. Furthermore, the assignment will only target architects working with sound absorption and exclude craftsmen, engineers, end users and others that might influence the decision process of choosing a solution for sound absorption.
FiberAcoustic's current marketing material will not be taken into account, but the thesis will develop guidelines based on relevant theory for FiberAcoustic to look through and compare with the material they already have to see if any improvements or additions should be made.
Finally, Aaker mentions credibility in his model as an important part of a brand identity. However, according to him, this is done most effectively from the brand endorser and not the line brand and will, therefore, not be touched upon.
1.6 Structure
To gain a better overview of the content of this thesis, the following will give a short description of each of the five chapters.
The first chapter, the introduction, will describe the point of departure of the assignment regarding problem statement, methodology, theoretical framework and delimitations and set the frame of the thesis. Next, chapter two will describe Fibertex as a company followed by a description of FiberAcoustic and their products. This background knowledge will be the basis of the self-analysis and market analysis that are part of the Brand Identity Planning Model by Aaker.