B2B brand extension to the B2C market--The case of the ICT industry in Taiwan

INTRODUCTION

Brand extension has been recognised as a strategic asset by most companies. Since the original study of Aaker and Keller,¹ research on brand extensions has mostly focused on what causes an extension's success.^{2, 3} Analogous to consumer marketing, branding is considered as a leverage of sustainable competitive advantage in business-to-business (B2B) environments.^{4, 5} In addition to consumer-based brands such as Coca Cola, Nokia and Nike, industrial brands such as Intel, AMD and GE are considered on the top brands as well.⁶ The inherent attractiveness of an industrial brand allows the customer-manufacturer or the customer-artisan to acutely identify and select a supplier brand, especially where repeat purchase decisions rely heavily on past performance.⁷

Brand identity is a set of brand associations that the brand strategist aspires to create or maintain.⁸ In the consumer markets, the emphasis is usually on the products or a cluster of products, whereas in industrial markets the company name itself is often the brand name.⁹ Chernatony¹⁰ argued that brand concept is context independent; thus, the concept of the corporate brand is the same as the concept of the product or service brand (it is the enactment that is different). Since the last decade, the focus of branding research has been extended from consumer products to corporate brands.^{11, 12} Empirical studies showed that industrial companies have recognised the benefits from using brand names¹³ such that a price premium can be obtained due to high brand equity.¹⁴ The 'halo effect' of brand equity, in which brand evaluations transferred from one category to another, was explored in the personal computer, copier, fax machine and floppy disk industries.¹⁵

Brand extension is defined as a current brand name used to enter a completely different product class.¹⁶ Most brand extensions have been in the consumer markets, though there are consumer brands that are extended from their original B2B brands such as Microsoft (BASIC computer programming language), IBM (tabulating machines), Nokia (forestry), Philips (carbon-filament lamps) and Caterpillar (heavy equipment). Nowadays, many B2B corporate brands, such as Intel, Dupont, Lycra, Kingston, Micron and Qualcomm are as famous as many consumer product brands.

For many Asian information communication technology (ICT) companies, especially those from four small tigers...