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.