MAKING A BRAND OUT OF A COMMODITY
Oprah Winfrey is a highly acclaimed public figure and a real influencer. For her fans and viewers, Oprah Winfrey embodies empowerment, genuineness, and kindness. That’s what she’s all about! That’s her brand.
A brand can be a person, place, firm, or organisation — it can represent a person, a location, a company, or an entire organisation. It encompasses the collective perception, values, and identity associated with any entity, whether it’s an individual, a physical space, a business, or
a larger group. At its core, every brand is either a commodity a product a service, or even an idea.
So, how do we contrast a brand and a product?
A product is anything put out for people to notice, get, use, or enjoy to meet a need or want. It could be something physical like breakfast cereal, a service like an airline flight, a shop, a person, a group, a spot, or even an idea like supporting a cause. While companies often focus on improving their products to compete, experts saythe real battle lies in what they offer beyond the basics. This goes beyond just the product itself— it’s about the packaging, services, ads, help for customers, how you get it, store it, and more. A brand isn’t just a product; it’s unique and stands out in how it meets needs, wants, hopes and aspirations. That can mean how well it works or the feelings and ideas it brings up.
A brand goes beyond just being a product—it’s what sets it apart from similar items fulfilling the same need. These differences could be straightforward, like how well the product works, or they could be about what the brand represents, tapping into emotions and deeper meanings.
Think of brands like Nestle’s Maggi noodles or Maruti’s WagonR car—they’re more than just things you buy. They could also be services like Air India or State Bank of India, stores like Spencer’s, famous people like Shah Rukh Khan or Virat Kohli, even places like the Indian state of Kerala, organisations like the UN, or big ideas like corporate responsibility or freedom of speech. It’s all about what these things mean to us!
Why Do Brands Matter?
For Consumers - Trust !
In our heads, we often pick just one brand name for a product, but it’s not always the same one. We go for the name that feels most fitting, whether it’s the big brand name, the model, or even a nickname. Like how someone grabbing bottled water at an Indian train station might simply say, “I got a Bisleri.” And a Figo car owner proudly declares, “I’m behind the wheel of a Ford.”
At the core of any enduring brand lies a foundation of trust, meticulously crafted and ardently nurtured. Trust isn’t merely about transactions; it’s about the steadfast belief and confidence stakeholders have in the brand’s promises, ethics, and consistency.
When a customer chooses a branded product over a non-branded one, they often experience a sense of assurance and confidence in their purchase. This decision can evoke feelings of trust, reliability, and familiarity. They might feel more secure about the product’s quality, consistency, and the overall experience it promises to deliver. Additionally, choosing a brand may give them
a sense of connection or identification with the values or image associated with that brand. Overall, opting for a branded product can instil a sense of satisfaction and certainty in the customer’s mind about their choice.
To attract customers, stakeholders, or followers and earn their support or investment, a brand must establish trust. Building trust hinges on being consistent, fulfilling promises, staying transparent, and demonstrating reliability. Trust is the cornerstone that connects a brand with its audience and fosters enduring relationships.
For Businesses - The Power of Influence and Perception
Brands extend far beyond the multitude of trademarks officially registered worldwide or the countless names and logos sanctioned by various countries. The true power of a brand resides in its capacity to influence consumer behaviour. However, a brand’s presence on the packaging doesn’t automatically equate to a strong presence in consumers’ minds.
When a customer dashes into a supermarket for essential items like bread and milk, they often opt for familiar, branded products. Yet, these purchases might not necessarily stem from a deep brand preference. These items are often viewed as commodities – ordinary and undifferentiated in the buyer’s perception.
Conversely, a customer purchasing a six-pack of beer or a carton of cigarettes is more inclined to seek out a specific brand. Conventional wisdom suggests a distinction between these categories: beer and cigarettes are perceived as brand-driven purchases, while bread and milk are seen as commodity purchases.
However, this distinction oversimplifies a critical aspect. Despite being commonly viewed as commodities, there exists a potential to build strong brands in categories such as bread and milk. Several companies have already accomplished this feat, exemplified by brands like Amul in the dairy sector within India.
The objective is to create in the mind of the prospect the perception that there is no other product on the market quite like your product - that’s branding !
The pinnacle lies in transcending the product and entering the revered domain of a brand. A brand isn’t just a product—it’s an experience, an emotion, a promise. It carries with it a unique identity, a resonating story, and a distinct value proposition.
Many practising managers refer to a brand as more than “name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition” — as something that has created a certain amount of awareness, reputation, prominence, and so on in the marketplace.
For instance, with countless websites available, it’s crucial to have a destination in mind before starting your internet exploration. While starting at a search engine site is an option, it’s temporary.
As brands become more entrenched in people’s minds, why bother with a search engine when you can directly visit a known site? Why go to Google or Yahoo! to find where to buy books when you can directly access Amazon.com? Amazon established itself early as a strong brand in the minds of book buyers.
Commodity, Product & Brand Continuum
Commodity - The Genesis:
At its genesis, a commodity stands as a raw, undifferentiated entity—a product of basic utility, often traded purely on price. Think of grains, ores, or generic raw materials—valued but not distinguished by any particular traits or associations.
Product - The Evolution:
As we move along the spectrum, a product emerges from this raw state by infusing it with value, uniqueness, and functionality. This transition is the result of ingenuity, innovation, or sometimes, simply branding strategies. The product stage marks the beginning of differentiation, where added features, quality enhancements, or unique propositions elevate it from the generic.
Brand - The Culmination:
However, the pinnacle lies in transcending the product and entering the revered domain of a brand. A brand isn’t just a product—it’s an experience, an emotion, a promise. It carries with it a unique identity, a resonating story, and a distinct value proposition. A brand holds the capacity to command a premium, not solely due to its functionality but because of the intangible yet powerful associations it has built with its consumers.
Consider the example of Apple Inc. The success of Apple isn’t merely attributed to its advertising campaigns or sleek product designs. It’s primarily due to the powerful brand they have built over the years. Apple’s brand is synonymous with innovation, simplicity, and premium quality. Despite numerous competitors offering similar products, Apple’s brand loyalty and perception set it apart.
Similarly, take the case of Coca-Cola. The Coca- Cola brand isn’t just about its beverages; it’s about the emotional connection it fosters with its consumers. Despite other soda companies, Coca- Cola’s brand history, storytelling, and emotional appeal have solidified its position globally.
EVOLUTION OF COFFEE
Coffee beans at their genesis are commodities. They are raw, undifferentiated, and traded predominantly on price. Whether it’s Arabica or Robusta beans, in their raw form, they lack distinct qualities beyond their basic utility—providing caffeine and flavour.
As these raw coffee beans move along the continuum, they transform into a product. For instance, speciality coffee emerges by infusing value, uniqueness, and functionality into these raw beans. This shift occurs through various processes like roasting techniques, blending, and packaging. Speciality coffee brands differentiate themselves by highlighting their unique flavours, origins, and quality, moving beyond the generic commodity.
The pinnacle of this continuum is achieved when certain coffee brands transcend the product stage and become revered brands. Take, for example, Starbucks. It’s more than just a coffee—it’s an experience, an atmosphere, and a lifestyle. Starbucks has cultivated a unique identity, a distinct story, and a promise of quality and consistency. The brand commands a premium not solely based on the coffee’s functionality but due to the emotional connections, ambience, and overall experience, it offers to its customers.
On the other hand, companies that struggled with brand perception often faced challenges despite heavy investments in advertising and marketing. For instance, despite considerable advertising and promotional efforts, Yahoo - one of the pioneers of the early internet era in the 1990s - struggled to maintain relevance as it failed to evolve to match changing consumer needs and preferences.
These examples highlight how a strong brand forms the cornerstone of a company’s success. It’s not merely about the superficial aspects of marketing; it’s the underlying brand strength that truly resonates with consumers and sets a company apart in a crowded marketplace.
The journey from commodity to brand is not just a shift in perception—it’s a testament to the power of innovation, storytelling, and consumer connection. To navigate this transformative journey, C-suite executives must embrace innovation, market understanding, and strategic planning. It requires a shift in mindset—from seeing products as commodities to envisioning them as canvases for brand experiences.
Conclusion
The continuum with coffee illustrates the journey from a raw, undifferentiated commodity (coffee beans) to a differentiated product (speciality coffee) and finally to a strong brand (like Starbucks) that embodies an entire experience and emotional connection beyond the product itself.
The transition from commodity to brand hinges profoundly on the concept of value addition. It’s the cornerstone that reshapes a product’s destiny. Value addition isn’t just about adding new fea- tures; it’s about enhancing experiences, providing solutions, and creating emotional connections.
In a market where commodities abound, the true winners are those who dare to add value, craft unique narratives, and metamorphose their offer- ings into brands that resonate deeply with their audience.
