IDEAS home Printed from https://ideas.repec.org/a/eee/ijrema/v31y2014i4p409-424.html
   My bibliography  Save this article

Impact of component supplier branding on profitability

Author

Listed:
  • Worm, Stefan
  • Srivastava, Rajendra K.

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.

Suggested Citation

  • Worm, Stefan & Srivastava, Rajendra K., 2014. "Impact of component supplier branding on profitability," International Journal of Research in Marketing, Elsevier, vol. 31(4), pages 409-424.
    • Handle: RePEc:eee:ijrema:v:31:y:2014:i:4:p:409-424
    DOI: 10.1016/j.ijresmar.2014.05.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167811614000494
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijresmar.2014.05.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Johansson, Johny K. & Dimofte, Claudiu V. & Mazvancheryl, Sanal K., 2012. "The performance of global brands in the 2008 financial crisis: A test of two brand value measures," International Journal of Research in Marketing, Elsevier, vol. 29(3), pages 235-245.
    2. David J Teece, 2008. "Capturing Value from Technological Innovation: Integration, Strategic Partnering, and Licensing Decisions," World Scientific Book Chapters, in: Technological Know-How, Organizational Capabilities, And Strategic Management Business Strategy and Enterprise Development in Competitive Environments, chapter 12, pages 237-252, World Scientific Publishing Co. Pte. Ltd..
    3. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    4. Zablah, Alex R. & Brown, Brian P. & Donthu, Naveen, 2010. "The relative importance of brands in modified rebuy purchase situations," International Journal of Research in Marketing, Elsevier, vol. 27(3), pages 248-260.
    5. Reimann, Martin & Schilke, Oliver & Thomas, Jacquelyn S., 2010. "Toward an understanding of industry commoditization: Its nature and role in evolving marketing competition," International Journal of Research in Marketing, Elsevier, vol. 27(2), pages 188-197.
    6. Tasadduq A. Shervani & Gary Frazier & Goutam Challagalla, 2007. "The moderating influence of firm market power on the transaction cost economics model: An empirical test in a forward channel integration context," Strategic Management Journal, Wiley Blackwell, vol. 28(6), pages 635-652, June.
    7. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    8. Vanitha Swaminathan & Srinivas Reddy & Sara Dommer, 2012. "Spillover effects of ingredient branded strategies on brand choice: A field study," Marketing Letters, Springer, vol. 23(1), pages 237-251, March.
    9. Wuyts, Stefan & Verhoef, Peter C. & Prins, Remco, 2009. "Partner selection in B2B information service markets," International Journal of Research in Marketing, Elsevier, vol. 26(1), pages 41-51.
    10. Hansen, Bruce E & West, Kenneth D, 2002. "Generalized Method of Moments and Macroeconomics," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 460-469, October.
    11. Philip Kotler & Waldemar Pfoertsch, 2006. "B2B Brand Management," Springer Books, Springer, number 978-3-540-44729-0, October.
    12. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    13. Johnston, Wesley J. & Lewin, Jeffrey E., 1996. "Organizational buying behavior: Toward an integrative framework," Journal of Business Research, Elsevier, vol. 35(1), pages 1-15, January.
    14. Wuyts, S.H.K. & Verhoef, P. & Prins, R., 2009. "Partner selection in B2B informational service markets," Other publications TiSEM 35b4b91f-294c-47a6-95b2-7, Tilburg University, School of Economics and Management.
    15. Sundar Bharadwaj & Anandhi Bharadwaj & Elliot Bendoly, 2007. "The Performance Effects of Complementarities Between Information Systems, Marketing, Manufacturing, and Supply Chain Processes," Information Systems Research, INFORMS, vol. 18(4), pages 437-453, December.
    16. Kathleen M. Eisenhardt & Jeffrey A. Martin, 2000. "Dynamic capabilities: what are they?," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 1105-1121, October.
    17. Wolfgang Ulaga & Andreas Eggert, 2006. "Value-Based Differentiation in Business Relationships: Gaining and Sustaining Key Supplier Status," Post-Print hal-00482456, HAL.
    18. Andrews,Donald W. K. & Stock,James H. (ed.), 2005. "Identification and Inference for Econometric Models," Cambridge Books, Cambridge University Press, number 9780521844413, November.
    19. van Osselaer, Stijn M J & Janiszewski, Chris, 2001. "Two Ways of Learning Brand Associations," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 28(2), pages 202-223, September.
    20. Birger Wernerfelt, 1988. "Umbrella Branding as a Signal of New Product Quality: An Example of Signalling by Posting a Bond," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 458-466, Autumn.
    21. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    22. Janice A. Black & Kimberly B. Boal, 1994. "Strategic resources: Traits, configurations and paths to sustainable competitive advantage," Strategic Management Journal, Wiley Blackwell, vol. 15(S2), pages 131-148, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xina Yuan & Zhaoyang Guo & Jin Won Lee, 2020. "Good connections with rivals may weaken a firm’s competitive practices: The negative effect of competitor ties on market orientation practices and innovative performance," Asia Pacific Journal of Management, Springer, vol. 37(3), pages 693-718, September.
    2. Watson, George F. & Worm, Stefan & Palmatier, Robert W. & Ganesan, Shankar, 2015. "The Evolution of Marketing Channels: Trends and Research Directions," Journal of Retailing, Elsevier, vol. 91(4), pages 546-568.
    3. Casey E. Newmeyer & R. Venkatesh & Julie A. Ruth & Rabikar Chatterjee, 2018. "A typology of brand alliances and consumer awareness of brand alliance integration," Marketing Letters, Springer, vol. 29(3), pages 275-289, September.
    4. Mullins, Ryan & Swain, Scott & Friend, Scott B., 2023. "How and should firms motivate salesperson effort across a Multi-Brand Portfolio?," Journal of Business Research, Elsevier, vol. 158(C).
    5. Anja Plumeyer & Pascal Kottemann & Daniel Böger & Reinhold Decker, 2019. "Measuring brand image: a systematic review, practical guidance, and future research directions," Review of Managerial Science, Springer, vol. 13(2), pages 227-265, April.
    6. Stefan Worm & Sundar G. Bharadwaj & Wolfgang Ulaga & Werner J. Reinartz, 2017. "When and why do customer solutions pay off in business markets?," Journal of the Academy of Marketing Science, Springer, vol. 45(4), pages 490-512, July.
    7. Abolfazl Shahabadi & Shiva Amjadian & Samineh Ghasemifar & Masoume Shafieian, 2023. "The effect of the national brand on high-tech exports in selected countries," Journal of Innovation and Entrepreneurship, Springer, vol. 12(1), pages 1-19, December.
    8. Anca BUTNARIU, 2017. "Ingredient Branding - A Growth Opportunity?," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 13, pages 101-107, May.
    9. Nguyen, Hang T. & Feng, Hui, 2021. "Antecedents and financial impacts of building brand love," International Journal of Research in Marketing, Elsevier, vol. 38(3), pages 572-592.
    10. Elisabeth Albertini & Fabienne Berger-Remy, 2019. "Intellectual Capital and Financial Performance: A Meta-Analysis and Research Agenda," Post-Print hal-02139763, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Homburg, Christian & Klarmann, Martin & Schmitt, Jens, 2010. "Brand awareness in business markets: When is it related to firm performance?," International Journal of Research in Marketing, Elsevier, vol. 27(3), pages 201-212.
    2. Homburg, Christian & Allmann, Jan & Klarmann, Martin, 2014. "Internal and external price search in industrial buying: The moderating role of customer satisfaction," Journal of Business Research, Elsevier, vol. 67(8), pages 1581-1588.
    3. Taha Havakhor & Rajiv Sabherwal & Zachary R. Steelman & Sanjiv Sabherwal, 2019. "Relationships Between Information Technology and Other Investments: A Contingent Interaction Model," Service Science, INFORMS, vol. 30(1), pages 291-305, March.
    4. Aletta Sophia Tolmay, 2018. "An Investigation Into the Personal Interaction Items Which Best Explain the Variation in Trust Within Automotive Supply Chains," International Journal of Information Systems and Supply Chain Management (IJISSCM), IGI Global, vol. 11(2), pages 77-91, April.
    5. Zerbini, Fabrizio & Borghini, Stefania, 2015. "Release capacity in the vendor selection process," Journal of Business Research, Elsevier, vol. 68(2), pages 405-414.
    6. Maree Storer & Paul Hyland, 2011. "Utilizing Industry-led Innovation Capacity to Enhance Supply Chain Performance : An Empirical Study," Modern Applied Science, Canadian Center of Science and Education, vol. 5(6), pages 1-55, December.
    7. Rezwanul Hasan Rana & Khorshed Alam & Jeff Gow, 2020. "The Impact of Immigration on Public and Out-of-Pocket Health Expenditure in OECD Countries," Journal of International Migration and Integration, Springer, vol. 21(2), pages 485-508, June.
    8. Frondel, Manuel & Kaestner, Kathrin & Sommer, Stephan & Vance, Colin, 2021. "Photovoltaics and the Solar Rebound: Evidence for Germany," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242356, Verein für Socialpolitik / German Economic Association.
    9. Eppinger, Peter S., 2019. "Service offshoring and firm employment," Journal of International Economics, Elsevier, vol. 117(C), pages 209-228.
    10. Yannis Psycharis & Stavroula Iliopoulou & Maria Zoi & Panagiotis Pantazis, 2021. "Beyond the socio‐economic use of fiscal transfers: The role of political factors in Greek intergovernmental grant allocations," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(3), pages 982-1008, June.
    11. Rodrigo-Alarcón, Job & García-Villaverde, Pedro M. & Ruiz-Ortega, María J. & Parra-Requena, Gloria, 2018. "From social capital to entrepreneurial orientation: The mediating role of dynamic capabilities," European Management Journal, Elsevier, vol. 36(2), pages 195-209.
    12. Committee, Nobel Prize, 2013. "Understanding Asset Prices," Nobel Prize in Economics documents 2013-1, Nobel Prize Committee.
    13. Isobe, Takehiko & Makino, Shige & Montgomery, David B., 2002. "Performance Impact of Technological Assets and Reconfiguration Capabilities: The Case of Small Manufacturing Firms in Japan," Research Papers 1768, Stanford University, Graduate School of Business.
    14. Anderson, Brian S, 2018. "Endogeneity and Entrepreneurship Research," OSF Preprints 75tn8, Center for Open Science.
    15. Seyedghorban, Zahra & Matanda, Margaret Jekanyika & LaPlaca, Peter, 2016. "Advancing theory and knowledge in the business-to-business branding literature," Journal of Business Research, Elsevier, vol. 69(8), pages 2664-2677.
    16. Kyuho Jin, 2022. "Can Business Groups Survive Institutional Advancements? Examining the Role of Internal Market for Non-Tradable, Intangible Assets," Sustainability, MDPI, vol. 14(17), pages 1-17, September.
    17. Wooldridge, Jeffrey M., 2019. "Correlated random effects models with unbalanced panels," Journal of Econometrics, Elsevier, vol. 211(1), pages 137-150.
    18. Pyper, Keith & Marie Doherty, Anne & Gounaris, Spiros & Wilson, Alan, 2022. "A contingency-based approach to the nexus between international strategic brand management and export performance," Journal of Business Research, Elsevier, vol. 148(C), pages 472-488.
    19. Marta Spreafico, 2013. "Institutions, the resource curse and the transition economies: further evidence," DISCE - Quaderni del Dipartimento di Politica Economica ispe0064, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    20. Tarifa Fernández, Jorge & de Burgos Jiménez, Jerónimo & Céspedes Lorente, José Joaquín, 2018. "Absorptive capacity as a confounder of the process of supply chain integration," MPRA Paper 120125, University Library of Munich, Germany, revised 2018.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ijrema:v:31:y:2014:i:4:p:409-424. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/international-journal-of-research-in-marketing/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.