How brand-oriented strategy affects the financial performance of B2B SMEs

Abstract

Purpose This study aims to examine the relationship between brand orientation and financial performance in business-to-business (B2B) small- and medium-sized enterprises (SMEs). It examines the impact of brand-oriented strategy on financial performance through four branding constructs, namely, internal branding, brand communication, brand awareness and brand credibility. Design/methodology/approach A questionnaire-based survey was conducted to collect data from 250 Finnish B2B SMEs. Confirmatory factor analysis was performed to examine the validity of the constructs, whereas structural equation modeling was used to test proposed hypotheses of the study. Findings The results suggest that brand orientation improves the effectiveness of brand communication and internal branding in building brand awareness and credibility. Brand awareness emphasizes an external route through brand communication, whereas brand credibility emphasizes an internal route through internal branding. Brand awareness has a positive impact on brand credibility, and brand credibility has a positive impact on financial performance, highlighting the importance of both brand performance components for financial performance. Originality/value This study addresses the research gap in the B2B branding literature regarding the role of branding in enhancing financial performance. The results suggest that brand-oriented strategy can contribute to financial performance through brand awareness and brand credibility in the context of B2B SMEs.

Do Brands Matter in Unlisted Firms? An Empirical Study of the Association between Brand Equity and Financial Performance

“…Furthermore, Johansson et al (2012) find that the strength of the relationship between brand equity and financial performance differs according to the measure applied and how each captures the equity. 2 Indeed, there is a scarcity of prior research on the links between brand equity and financial performance, particularly in unlisted firms, even though there is some preliminary research focused on small and medium-sized enterprises (Anees-ur-Rehman et al 2018).…”

Managing and building B2B SME brands: an emerging market perspective

“…More "integrated" management approaches are, by contrast, characterised by brand-centric management activity, which continually and systematically reflects on the interrelationships between branding, marketing and economic performance (Baumgarth, 2010). Generally, emerging B2B SME research reveals that brandoriented firms have a higher impact on B2B marketing achievement (Mäläskä et al, 2011;Mitchell et al, 2015;Urde et al, 2013;Anees-ur-Rehman et al, 2018).…”

“…One common SME practice involves imitating and mimicking the branding communication practices of LOs (Spence and Essoussi, 2010). Some research on SME brand communication has found that a firm's interaction with customers is key, as such encounters lead to the spread of Word of Mouth (WOM) communication, and thus generate and disseminate brand awareness (Anees-ur-Rehman et al, 2018;Berthon et al, 2008). In retailing industries, SMEs adopt experiential marketing tools in their approach to brand communication strategy by conceiving of the store environment as a "brand-scape", where interaction between customers and the firm can be designed to inculcate brand awareness through affective customer experience (Hollenbeck et al, 2008;Mitchell et al, 2015).…”

Customer Loyalty and Brand Management

“…Fifth, Anne Schmitz and Nieves Villaseñor-Román examine the links between brand equity and financial performance in unlisted (unquoted) firms. These authors underline the scarcity of prior research on this issue in this type of firm (Anees-ur-Rehman et al, 2018) and the importance of marketing managers better assigning marketing efforts towards the construction of a brand equity that improves firm profitability. These authors provide evidence that unlisted firms that invest more resources in brand equity have better financial performance, greater earnings persistence and more future profitability.…”