It is generally recognized that it is very difficult for the wholesaler to control the transaction between the retailer and the final consumer. This underpins the difference between business marketing and consumer marketing. Although there are various levers such as price and delivery times, these are often too remote to have any direct impact on the relationship. Moreover the seller always has the option of moving to other retailers in a crowded market.
Branding can be one alternative for a wholesale to extend some of the organizations business influence down to the relationship between the retailer and the consumer. The brand will have certain characteristics which make it desirable and thereby give the wholesaler the discretion to dictate terms.
The retailer can be persuaded that the wholesaler needs certain minimum standards so that the brand image can be obtained. In fact these can be written into the contract. Some brands are created not just on the physical characteristics of the product but also the way it is delivered. For instance a brand might request that faulty products are replaced or that all products cannot be at anything other than a particular price.
Given the complexities of the business marketing relationship, branding offers a solution in terms of allowing the original producer of a product to determine the manner in which it is delivered to the consumer. If the brand is strong enough then most retailers will be more than happy to be associated with the product. Consequently they will accept terms which they would never contemplate in another situation.
Branding is not without its problems. First of all the process of creating a brand takes a very long time. It requires a multiplicity of resources and factors. It may even involve a great deal of direct marketing and sponsorship. Many small businesses do not have this kind of outlay to be able to compete. Furthermore if the other members within the business marketing chain are not branding their products, those organizations that choose to brand theirs may end up high cost and higher prices which will eventually eat into sales.
Retailers will also find that they have their own customs and terms for dealing with consumers in their own marketing situation. Any interference from the manufacturer or wholesaler could cause resentment and the whole contract could end up collapsing on that basis. Branding is a risky business because it ends up upsetting the traditional balance between the business trading elements and the consumer elements of commerce. It also involves the wholesaler venturing further down into areas of marketing which were traditionally handled by the retailer.
En conclusion branding is one tool that can be used if the wholesaler feels that the retailer is not marketing their product in the way that was intended. Branding sets minimum standards for the delivery of the product and these standards are crucial in affecting the behavior of the retailer. Given the incredible investment required in terms of money, time and creativity branding should only be used when there is a certainty about the results.