The key to growth for Japanese B2B companies lies in "Corporate Branding × Business Strategy"!

Corporate branding is gaining increasing importance in B2B business.

Compared to B2C business, branding has not been prioritized in B2B business. In purchasing decisions, "functional value" has been emphasized, while "emotional value" has been overlooked.

Here, functional value and emotional value refer to the following:

• "Functional value" = The features and performance of a product or service
• "Emotional value" = Excitement/inspiration arising from the story behind the service, affinity/trust toward the company

However, in this VUCA (volatility, uncertainty, complexity, ambiguity) era, the business environment has changed. Going forward, "corporate branding" is essential—communicating "emotional value" to all stakeholders involved in purchasing decisions to gain their empathy. Furthermore, corporate branding must be integrated with business strategy and pursued company-wide; otherwise, it will not lead to business growth.

In this article, Hiroshi Tanaka of Dentsu Consulting Inc.—who has engaged with numerous B2B businesses from both internal (operating company) and external (consulting) perspectives—explains two crucial guiding principles for corporate branding.

<Table of Contents>
▼ "Emotional Value" Was a Distant Concept for Japanese B2B Business

▼ The Groundwork for Corporate Branding Driving B2B Business Growth Is Now in Place

▼ Pursue "Consistency" in Brand Image Through Unified Corporate Organization

▼ Why Not Link Purpose and Business Through an "Integrated Statement"?

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"Emotional value" has long been a distant concept for Japanese B2B business.

In B2B business, multiple individuals are typically involved in the decision to purchase products or services, not just one.

Because multiple decision-makers engage in repeated discussions to reach a rational decision, the decision-making process in B2B business takes time.

The seller's sales representative aims to reach an agreement with the purchasing representative, the "customer in front of them." However, it is rare for this alone to lead to a purchase decision.

"We need to get approval from the decision-maker, the superior..."
"We need to consult with the experts..."

and other hurdles must be overcome before the purchase is finally decided. In other words, the buyer side makes purchasing decisions involving not only the direct decision-maker but also indirect decision-makers.

In Japan's B2B business to date, "functional value" has been emphasized. This means that when appealing to indirect decision-makers, such as the approving superior, "functional value" also played a major role, just as it did for the direct decision-maker.

This is because the prevailing mindset was that "products with superior functionality and performance sell well," making it easier to gain acceptance through explanations using numbers and words.

On the other hand, many overseas B2B companies also engage in branding to achieve strong competitive advantage.

Here, I'd like to present a contrasting case using the example of a materials manufacturer that leverages its technical expertise to provide the "functional value" of its products.

Two companies that differentiated themselves from competitors by appealing to "functional value + emotional value"

First, let's look at two overseas manufacturers: 3M and DuPont. These two companies have each brought numerous innovative materials to the world, essentially providing "functional value."

• 3M... Commercialized Post-it notes using easy-to-peel adhesive microspheres
• DuPont... Developed nylon and Teflon

Beyond that, they didn't stop at functional value.

• 3M adopted "Science. Applied to life."
• DuPont adopted "The miracles of science "

have built corporate images suggesting they are "advanced and innovative, leveraging technological prowess to continuously create new applications for the world." In other words, they have also prioritized branding that conveys "emotional value."

As a result, when new applications requiring high technology were developed, these companies were approached first. They handled more development projects than companies that weren't approached, which naturally led to more business opportunities.

■Japanese Companies Possessing Advanced "Functional Value" Yet Unable to Appeal to "Emotional Value"

On the other hand, some companies, even if their technical capabilities are comparable to competitors, lack an image of being advanced or innovative. Instead, they are strongly associated only with the "trust" image generated by the earnestness of their sales representatives. This is particularly common among Japanese B2B companies.

These companies excel at growing business with existing customers. However, they often struggle to acquire new customers. This stands in stark contrast to companies like 3M or DuPont, which possess an advanced and innovative image and consistently succeed in winning new customers.

This difference within the same industry has been recognized for at least a decade. Yet, in Japan, the belief that "appealing to functional value is paramount" remains deeply ingrained to this day.

That is,

"By continuously demonstrating competitive advantage in functional value, we can earn customer trust and thereby sustainably acquire new business."

The "customer trust" here is an emotional value, but it is the result of appealing to functional value, not the result of branding.

The groundwork is now laid for corporate branding to drive B2B business growth.

As mentioned initially, changes in the market environment have made branding increasingly essential for business growth even in B2B sectors.

Here, branding refers to "building a positive reputation and image while appealing to emotional value." We have identified three key reasons why branding has become crucial in B2B business.

① Differentiation has become difficult relying solely on functional value propositions

First, it has become increasingly difficult to differentiate from competitors by appealing solely to functional value. The pace of change in the world is accelerating. Even if you try to differentiate yourself from competitors through the features and performance of new products or services, they are quickly imitated, and that advantage is lost.

Therefore, demonstrating the emotional value—how using that product or service stirs the heart or inspires awe—has become the breakthrough strategy for differentiation.

② Potential buyers can now gather information online

The second factor is that even in B2B business, the internet has become the standard method for obtaining information to support purchasing decisions.

Research indicates that during the purchasing consideration process—spanning "Awareness," "Interest," "Search," "Comparison," "Request for Information," "Request for Proposal," "Negotiation," and "Purchase"—decision makers independently gather information online through the "Comparison" stage, which accounts for 57% of the entire process(※).

※Survey conducted by the U.S. think tank Corporate Executive Board in 2012. →Related article

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In the past, I believe the image of the sales staff who visited our company had the greatest influence during the purchasing decision process. However, based on the survey results above, it is now the "company image on the internet" that significantly influences potential buyers as they narrow down their list of candidate companies.

③ Increased interest in a company's contributions to society

Third, people have become more interested in how companies engage with the SDGs and what purpose they hold.

It is now mainstream for companies to communicate their raison d'être, approach to social contribution, and the stories behind their products and services not only to direct customers but also to the broader public. B2B companies must gain empathy by providing emotional value through these efforts, positioning themselves as "companies that benefit society" and "reliable companies."

As positive perceptions and empathy toward a company grow among people, it influences many purchasing decision-makers, especially indirect decision-makers. They become more inclined to think, "Buying from this company is a good choice," increasing the likelihood of consensus.

Furthermore, while purchasing was traditionally a one-way transaction where buyers received goods or services from suppliers, many companies now increasingly have opportunities to "co-create" products and services. In this context, "empathy" fostered through corporate branding can also be an effective means to gain broad cooperation.

Companies seeking co-creation partners also prefer collaborating with businesses "doing good for society" over those "only focused on themselves" when launching new ventures.

The entire corporate organization must pursue "consistency" in brand image.

So, how should branding be approached in B2B business? The key point is that the "emotional value" provided must align with the "functional value" offered and the business direction. The greater the alignment between these two, the higher the likelihood of purchase, which is expected to lead to business growth.

Specifically, what mindset is required? The author believes the following two points are crucial.

1. Pursuing consistency in content and expression
2. Unifying the entire corporate organization

Note that branding here primarily targets not only "indirect purchasing decision-makers"—such as superiors and specialists within the purchasing company—but also potential customers, investors, and within the general public, young people who are potential employees.

Let's examine each in detail.

1.Pursuing Consistency in Content and Expression

[By pursuing content aligned with the business direction regarding the emotional value communicated and an expression policy that leads to a consistent customer experience, we gain stronger empathy]

How can we communicate emotional value to gain empathy? The author believes it is crucial to pursue "consistency in content and expression" while linking it to the business.

Whether it's corporate advertising or public relations activities, to communicate with consistency, first identify the "shared value proposition" across multiple business units. Based on these common elements, create expressions that evoke the company's unique identity.

Consider a diversified company with three divisions: A, B, and C. Each division, following its own strategy,

• Division A emphasizes "high functionality"
• Division B emphasizes "sales proposal capabilities"
• Division C: "High global supply capability"

Let's say each division emphasizes these points. This approach lacks a "shared value proposition" and is disjointed. However,

• Division A emphasizes "adding value to materials to achieve unparalleled functionality,"
• and Division B emphasizes "adding value to materials to propose solutions that align with customer needs,"
• and Division C "adds value through cost competitiveness in materials by leveraging global supply capabilities."

What if we were to proclaim this?

All divisions can be grouped under the common characteristics of "having the ability to enhance value by leveraging materials" and "being able to make the ordinary shine," which connects to the company's unique identity.

Furthermore, it would be desirable to shape an image that links these common traits to the future direction of the business, such as solving social issues. In this case, the image of "contributing to society" aligns with the actual business direction, likely generating stronger empathy.

While the characteristics demonstrated by each division remain unchanged, failing to identify the "common elements" between divisions prevents the formation of a consistent image for the company as a whole.

Furthermore, consistent guidelines are required for the "expression" used in communications. These guidelines are essential for designing the customer experience, ensuring that all linguistic and visual elements communicated across every customer touchpoint are shaped by the same policy.

For example, to build a customer experience based on consistent guidelines, Daikin expresses the following four core brand images through words and video, rigorously applying design expressions that align with these images.

1. Profundity: What lies deep within
2. Consideration: Thoughtfulness
3. Exploration: Seeking the new
4. Passion: Holding Enthusiasm

Of these, the first two express the solid, earnest image reminiscent of Daikin's past, while the latter two express an image looking toward the future. This combination of four images expresses Daikin's will to become a brand that grows while cherishing its connection to the past and leads the world.

Consistent implementation of this expression enables Daikin to project a unified corporate image across all customer touchpoints and experiences—whether online, at exhibitions, or in direct sales interactions.

2.Unification Across the Entire Corporate Organization

[By implementing branding linked to business strategy that unites the entire corporate organization—including business divisions and headquarters/corporate functions—we can translate the resulting resonance into business growth.]

Corporate branding is not a one-time exercise; it must clearly contribute to business growth.

After communicating "consistent emotional value" to gain resonance, how can this be leveraged for business growth? The author believes "achieving integration across the entire corporate organization" is crucial.

Within companies, roles are often divided: business units create the "business reality," while headquarters and corporate functions build the "reputation" (i.e., branding).

Regarding branding content, I believe many cases appeal to abstract images, such as "a company solving specific societal challenges" or "a company possessing indispensable future technologies."

When delving deeper into the business, this can be linked to the actual related business operations, such as "how we are realizing indispensable future technologies through specific business activities." This means the entire company unites to promote both "building the substance of the business" and "branding."

By linking corporate branding to the actual substance of its business operations in this way, abstract concepts become concrete. They are recognized as the company's unique identity and resonate with people.

Furthermore, when that "corporate identity" can be experienced at every customer touchpoint, the resonance becomes even stronger.

This strong image, grounded in tangible reality rather than abstraction, also drives purchasing decisions and contributes to business growth.

Why not connect your purpose and business through an "Integrated Statement"?

Finally, we introduce the Dentsu Group's " Integrated Statement " framework.

This framework connects purpose to business strategy and translates it into action. It's already being utilized not only in B2C businesses but also in B2B businesses.

If you're wondering what kind of branding to pursue in B2B business, please feel free to contact Dentsu Consulting Inc.

*Visit the Dentsu Consulting Inc. website here

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