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brand strategy for a commodity

Using Brand Strategy to Differentiate a Commodity

Differentiation is critical for commodities to achieve any marketing advantage. With few exceptions, such as monopolies like the cable companies and one-of-a-kind products like Polaroid was years ago, differentiation is critical to creating a preference or commanding a premium price. If your product or service is not differentiated, there is no reason to choose yours over others, and you will wind up competing on price.

The good news is that there are many ways to differentiate commodity products and services. I used to be in the business of selling flour, shipped by trainloads from the Midwest to large, commercial bakeries on the East Coast. Trains can get delayed for a variety of reasons, so the bakeries needed to build expensive flour storage facilities on their premises for back-up. We built our own flour storage facilities in locations from which we could reach the bakeries by truck within a few hours. This gave the bakeries an assured supply on demand, and it eliminated the necessity of tying up their capital by building storage facilities. In this way, we created a preference and price advantage for our commodity.

There are many other ways to differentiate commodity, such as:

  • Risk – eliminate or reduce your customers’ potential risks.
  • Inventory – offer inventory management or convenience.
  • Financing – develop customer financing options, appeals and incentives.
  • Rewards – consider a rewards program to encourage loyalty.
  • Sustainability – appeals to customers, employees and communities.
  • Packaging – use packaging for convenience, or badging, to stand behind your commodity.
  • Ingredient – create a proprietary ingredient or concept available only in your commodity.
  • Bundle – or unbundle, your products and services.
  • Segment – your market, and tailor your marketing to the most profitable segments.
  • Experience – provide a superior purchase or usage experience: easier, faster, more flexible.
  • Consulting – become an expert in your customers’ industry and become a valued authority.
  • Facilities – showcase impressive facilities, operations and equipment as sales tools.
  • Safety – commitment to the health and safety of yours and your customers’ workforce.
  • Marketing – create appealing marketing materials and concepts.
  • Brand Strategy – build and support a compelling identity, story or promise.

Let’s talk about Brand Strategy: Gasoline is a commodity that relies on differentiated brand strategies. These strategies usually involve ingredient branding: Shell NiTRO gasoline (to protect your engine); Exxon/Mobil Synergy gasoline (Better for the environment); Chevron “With Techron” gasoline (to maximize your mileage).

Some of the most successful brand strategies have been created to differentiate a commodity. Think about Morton’s Salt, Gold Medal Flour, C&H Sugar, Sunkist Oranges. Water, once the ultimate commodity, is now a range of differentiated products aimed at different market segments and desires. Water is differentiated by its source (Fiji, Lake Geneva, Glacial Iceland, Artesian Springs) or by its character (Vitamin Water, Mineral Water, Smart Water).

With a clear brand strategy, good market data, strategic naming and design, creative communications, and resources aligned to support your goals, you can differentiate any commodity to create a preference or command a premium.

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branding_v_marketing

Branding vs. Marketing

Sometimes our clients ask us, “What is the difference between branding and marketing?” The question arises because most people and organizations use these terms interchangeably. Unlike Medicine, Law or Finance, practitioners in the field of brand and marketing don’t share a common professional language. When one doctor says a patient is suffering from nephritis, another doctor will understand that the patient has inflammation of the kidneys. When one lawyer says he has an affidavit, another lawyer will know he has a written statement made under oath.

Ask 20 marketers what branding is, and you may get 20 different answers. To some it may mean creating a logo, to others it may mean developing an advertising or public relations campaign, to others it may mean initiating social media conversations. Because the term “branding” is used to mean so many different things, it doesn’t have a specifically agreed upon meaning. For some clients, especially higher education, we sometimes have to avoid the word altogether, because it not only misunderstood, it is looked down upon as “beneath” academics.

We make a point of telling our clients at the outset of any assignment what we mean when we use particular words, so at least, they’ll know what we are talking about. We fully recognize that others may use these words differently. We use them in this way:

A Brand – is the promise you make to your audiences. Strong brands are valuable assets, because when the promise is fulfilled, it creates an emotional response. Strong brands can create a preference or command a premium and assure a future stream of revenue. The name and visual expression of that promise is called a brand identity, because it gives you a way to identify with the promise being made.

Branding – is about positioning the brand to fill a need, meet expectations, build trust and develop relationships. It’s about keeping your promise differentiated, relevant, compelling and true.

Brand Strategy – is about determining how many brands you need and can afford to support, what each brand should stand for, and what relationships should or should not exist between the brands and the parent organization.

Marketing – is about finding and growing a market for the brand that leads to profitable sales, or in the case of non-profits, that leads to appreciation and support among key audiences.

Marketing Strategy – is guided by business goals, and involves segmenting markets, selecting target audiences, determining pricing, packaging and distribution, integrating media, and executing creative campaigns.

Consider a stand out brand like Nike. The Nike brand promise is to bring inspiration and innovation to every athlete in the world. “If you have a body, you’re an athlete” says Nike. This brand promise demands a diverse, creative attitude-laden execution across the many customer touchpoints. That is branding. Nike’s innovative use of celebrity athletes and digital, social, mobile and retail channels to engage with existing and aspirational athletes, is marketing. Nike’s marketing strategy is highly influenced by the brand promise and expression – and the resulting ads, promotions, communications and offers feel like they could come from no other sports brand.

Bottom Line: We define branding as making, communicating and delivering a promise. Branding is a long-term commitment. We define marketing as finding and connecting with the audiences who will most benefit from that promise. By its nature, marketing tends to planned out with shorter term goals. Marketing strategies and campaigns will come and go, but brands should endure. While definitions of branding and marketing may differ, it is important that people use agreed upon definitions of terms, to ensure that you meet both short and long-term objectives for your business.

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How to Turn Your Employees Into Brand Advocates

How to Turn Your Employees Into Brand Advocates

Your employees are your biggest marketing opportunity. Why? Because if they are engaged with your brand, they can be your number one marketers and boosters of brand equity. How do you convert this potential business-changing force into brand advocates? Achieving employee brand engagement was our topic at the last Silicon Valley Brand Forum.

Empowering employees as brand advocates is critical to successful brand evolution. When you change or evolve your brand identity, your internal audience is just as important as your external audience. Ideally, your employees are the engine driving brand transformation. For that reason, we ask every client to engage their employees when changing their brand identity.

Engaging your employees

To be effective, brand identity work must inspire employees as an idea they can rally behind. Quantitative research can give you data, but qualitative research helps you hear and feel culture from the key voices and the personalities who make it real. You can’t just change your logo and tell employees, “All right, everyone, fall in line and be part of this.” Your brand essence starts within your company, and employee brand advocacy requires investment, cultivation and authenticity. It also must capture your employees’ spirit and passion. If your employees are engaged, you will have a firm foundation for moving forward with change.

Four factors for empowering employees as brand advocates

A new brand identity should be both aspirational and authentic to employees. It’s essential that employees:

  1. See themselves in the new positioning
  2. Believe in the vision and aspiration behind the new identity
  3. Understand that the new brand has meaning and value
  4. Feel recognized for their part in adding value to the brand

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Ten Principles for Renaming, from Alina Wheeler’s Designing Brand Identity V | Marshall Strategy

Ten Principles for Renaming

from Designing Brand Identity, 5th Edition, by Alina Wheeler
We’re pleased to be included in the fifth edition of Designing Brand Identity, by Alina Wheeler. This comprehensive guide to brand identity is a valuable resource for designers, marketers, CEOs, brand builders and internal teams. For the new edition, we contributed a list of key principles to consider when renaming your product or a company.

Ten Principles for Renaming

by Marshall Strategy

  1. Be clear about why change is needed. You should have a compelling reason, and clear business benefits, for going through the name change process. Making a strong case for change – whether legal, market-based or other, will help rise above emotional issues and enable a more successful and meaningful effort.
  2. Assess the impact of change. A name change is more complicated than creating a new name because it affects established brand equity and all existing brand communications. You should conduct a thorough audit of equity and communication assets, to fully understand how a name change will affect your investments and operations.
  3. Know what your choices are. Depending on your reason for change, it can be very difficult to consider change in the abstract. It is much easier to commit to a change when you have alternative names to consider that solve your communication issues.
  4. Know what you are trying to say before you name it.  Naming is a highly emotional issue that can be hard to judge objectively. By first agreeing on what your new name should say, you concentrate your efforts on choosing the name that says it best.
  5. Avoid trendy names – By definition, these are names that will lose their appeal over time. Choosing a new name simply because it sounds “hip” or “cool” generally results in names that wear quickly.
  6. “Empty Vessel Names” require filling. Made-up or meaningless names will require more investment to build understanding, memorability and proper spelling than names that have some inherent meaning. Compare the immediate meaning and relevance of names like Google and Amazon to empty vessels like Kijiji and Zoosk.
  7. Avoid names that are too specific. This may be the reason you needed to change  in the first place. Names that identify a specific geography, technology or trend might be relevant for a period of time, but in the long run they could restrict your ability to grow.
  8. Understand that a new name can’t do everything. Names are powerful tools, but they do not tell the whole story. A name change alone – without rethinking of all brand communications – could risk being seen as superficial. Consider how new taglines, design, communications and other context-building tools should work with the new name to build a rich new story that you can own.
  9. Ensure you can own it. Check patent and trademark offices, common law usages, URL’s, Twitter handles and regional/cultural sensitivities before you decide, and make the investment to protect your name. This is best done by an experienced intellectual property attorney.
  10. Transition with confidence. Make sure you introduce your new name as part of a value-oriented story that conveys clear benefits to your employees, customers and shareholders. The message “we’ve changed our name” on its own generally falls flat. Commit to the change with confidence and implement as quickly and efficiently as possible. Having two names in the market at the same time is confusing to both internal and external audiences.

If you wish to make a meaningful statement, a name change is not enough. The name should represent a unique, beneficial, and sustainable story that resonates with customers, investors, and employees.

Philip Durbrow, Chairman & CEO, Marshall Strategy

Companies change their names for many reasons, but in every case, a clear rationale for change with strong business and brand benefits is critical.

Ken Pasternak, Managing Director, Marshall Strategy

Notable Renaming

Old Name

New Name

Anderson Consulting Accenture
Apple Computer Apple
Backrub Google
The Banker’s Life Company Principal Financial Group
Brad’s Drink Pepsi Cola
Ciba Geigy + Sandoz Novartis
Clear Channel iHeartRadio
Comcast (Consumer Services) Xfinity
International Business Machines IBM
Datsun Nissan
Diet Deluxe Healthy Choice
Federal Express FedEx
GMAC Financial Services Ally Financial
Graphics Group Pixar
Justin.tv twitch
Kentucky Fried Chicken KFC
Kraft Snacks Division Mondelez
Lucky Goldstar LG
Malt-O-Meal MOM Brands
Marufuku Company Nintendo
Mastercharge Mastercard
Mountain Shade Optic Nerve
MyFamily.com Ancestry
Philip Morris Altria
Service Games SEGA
ShoeSite.com Zappos
TMP Worldwide Monster Worldwide
United Telephone Company Sprint
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