Branding Commodities

We recently conducted a workshop on branding commodities in Dubai, United Arab Emirates. A commodity, per one Merriam-Webster dictionary definition is “a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (as brand name) other than price.” By definition, commodities lack the differentiation and ability to charge a price premium that strong brands have. Several participants in the workshop represented different energy companies. Each one wanted help in being able to charge a 10-20% price premium for his or her “commodity” products.

Here is the good news -- a colorless, odorless, relatively tasteless alcoholic beverage (vodka) has been branded and commands a price premium -- one brand (Absolut) due to its consistently advertised bottle shape alone. And, of course water has been branded. I remember paying $23 for a bottle of Voss branded water at a restaurant in La Jolla, CA several years ago when that brand was first introduced. And bananas and pineapples are branded. Frank Purdue fed his chickens marigolds and ground carrots to give them their differentiated, healthy looking coloring.

I am a firm believer that everything can be branded/differentiated. I have never encountered a product or service that I could not brand/differentiate. So if it is possible, what are some of the tactics for doing so? For B2B brands, you can pursue any combination of the following to provide differentiation:

•Superior product or service consistency (quality control)
•Superior ability to customize products or services to a customer’s specific needs
•Superior responsiveness (order fulfillment, technical support, customer service)
•Optimal/preferred bundling/unbundling of products and services, creating greater perceived value or better fitting a customer’s approach to purchasing
•Superior range of products and services (one-stop shopping)
•Value chain integration
•Unique/preferred/more accessible distribution approach
•Identify your most important/profitable customers or customer segments and focus on meeting their unique needs
    oConduct conjoint analysis to determine what they value the most

For consumer products, you can add the following:

•Ingredient branding
•Unique packaging
•Emotional branding (‘brand as a badge,’ superior purchase/usage experience)
•Unique attitude/personality

In emotional branding, the brand stands for something important to the target customer. It projects and reinforces his or her intended self-image. Being associated with that brand says something about who he or she is. It says I am sexy, I am stylish, I am rich, I have high social status, I am concerned about the environment, I am frugal, I am powerful, I am smart, I am kind, I am spiritually evolved, I am athletic – the list could go on and on.

For brands in which there is no product or service differentiation, the role of the marketer becomes critical. The brand itself, and what it stands for, may become the primary or only point of difference.
While this is a quick survey of the topic, I hope I have shown you that any product or service can be differentiated/branded in a way that allows for a price premium to be charged. One needs to ideate (brainstorm) in a focused way around each of the differentiation approaches listed above to arrive at a successful differentiation strategy for his or her brand. (More on Ideation here) And, don’t forget, any successful differentiation approach must pass this test:

(1) the differentiating benefit is highly important to the target customer, (2) your brand can deliver the benefit well and (3) your competitors cannot. That is, your brand must promise to fulfill a strong customer need for which there is a marketplace gap.

I wish you great success in branding your commodity. If you need some help, let me know.