Impact of component supplier branding on profitability

Worm, S and Srivastava, R K (2014) Impact of component supplier branding on profitability. International Journal of Research in Marketing, 31 (4). 409 - 424.

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Abstract

In recent years, many business-to-business (B2B) component supplier (CS) firms have added branding to their marketing toolbox. By extending the logic of ingredient branding to B2B components, they aim to create “pull” from B2B end customers by building a strong CS brand image among their customers' customers. In contrast with the established “push” approach of building strong relationships with original equipment manufacturers (OEMs), it is unclear whether and under which conditions CS branding is a worthy strategy. On the one hand, anecdotal evidence suggests that suppliers can leverage strong CS brand image in negotiations with increasingly powerful OEMs to enhance their financial performance. On the other hand, many B2B managers believe that branding does not work in their industry context and erodes profitability. We build a data set consisting of survey measures and archival data across a broad set of industries. Our results indicate that the financial outcomes of CS branding largely depend on the characteristics of the CS and OEM industries. Unlike dyadic OEM–CS relationships, which enhance profitability invariably across industry contexts, CS branding is effective only in well-defined situations. CS branding initiatives can enhance return in CS industries with substantial levels of product differentiation and technology intensity. However, unfavorable results may arise in industry contexts in which OEM–end customer relationships or OEM brands are important.

Affiliation: Indian School of Business
ISB Creators:
ISB CreatorsORCiD
Srivastava, R Khttps://orcid.org/0000-0002-5236-2375
Item Type: Article
Additional Information: The research paper was published by the author with the affiliation of Singapore Management University.
Uncontrolled Keywords: Business-to-business brands, Ingredient branding, Component supplier branding, Brand performance, Financial performance
Subjects: Marketing
Depositing User: Veeramani R
Date Deposited: 30 Apr 2019 11:10
Last Modified: 30 Apr 2019 11:10
URI: http://eprints.exchange.isb.edu/id/eprint/907
Publisher URL: https://doi.org/10.1016/j.ijresmar.2014.05.005
Publisher OA policy: http://sherpa.ac.uk/romeo/issn/0167-8116/
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