B2B Marketing – On Big Deals and Branding Power

Apple’s 3 billion-dollar deal with Beats has been its biggest yet but many are saying the move has more to do with branding power than technology. You may neither have the branding power or the money to buy it but are things really as simple as that? Can your B2B marketing campaign really kick it in to high gear just by having a certain brand in your campaign?

Connection with the power players.

Beats co-founders Jimmy Iovine and Dr. Dre will join Apple as a result of the deal. This deepens company’s connections to music industry power players. Expect those connections to really crank up influence wise.

On the other hand, the responsibility goes both ways. Dr. Dre’s been shown celebrating the deal on a YouTube video but it’s still going to be up to him to really make sure Apple gets its 3 billion worth (even if it is just on branding). Connecting with the power players in your industry can be just as steep. You have to make sure they’re worth the money being exchanged. To you or from you, it doesn’t matter when it’s really reputation that’s being put on the table here.

Reliance on branding.

Some statistics show that Beats headphones were purchased more for style than simply sound quality. Education tech company Chegg surveyed 10,000 students about their experience with Beats and what they understand about the Apple-Beats merger. Only 15 percent had purchased Beats products even though they knew of the brand. But of course, that didn’t stop them from believing the deal would improve Apple’s image in their eyes.

This though still doesn’t address the risk posed by branding dependency. On one hand, Beats is more credited with simply creating awareness around audio quality instead of offering real quality products. That can improve the market as a whole but are you sure you want to be the company that won’t get much out of it individually? Depending on your bottom line objectives, reliance on branding can be a good investment or the worst gamble you’ll ever make.

Long-term strategy.

Apple released iTunes Radio last September but does not allow you to pick and choose specific music in the style of Beats own streaming service (or that of competitors like Spotify).

From the looks of it, it seems clear that Apple has no intentions of it relying on just Beats’ branding power and seeks to bank on a more long-term goal in the music streaming business. But again, whether or not this pans out is anyone’s guess. Investing big money for the long-haul isn’t unheard of but it’s not exactly something every business owner instantly jumps into (whether it’s a B2B buying decision, a merger, or even a major stock investment).

Making big plays and writing out big cheques for it is really a funny but oversimplified way of understanding big business. When you’re spending that much money, your risks could amount to just as much (if not higher). So if you’re going to spend big bucks, learn to buy more than just branding power.