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Brand Strategy

Brand Strategy For Commodities

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I remember a particular branding workshop that I was conducting in Dubai a few years ago. Marketing managers from throughout the Middle East attended, including many from different energy companies.

In the pre-workshop survey, several of the energy company marketing managers (from different companies) indicated that they wanted to know how to differentiate their energy brand so that they could charge a price premium over the competition in what is largely a commodity category. At the beginning of class, I recounted the pre-workshop request and indicated that I could help them differentiate their brands but that each company would have to choose a different approach to brand differentiation for it to work.

We use a specific exercise in our educational workshops to prove that commodities can be differentiated. We create a team competition to brand water, the primary component of the earth’s surface, our bodies and almost every other living thing on this planet. This is as close as it gets to branding a pure commodity. We ask the teams to determine the target customer, brand position, brand story, advertising campaign and packaging, pricing and distribution strategies, among other marketing elements.

Over the years, some very good new business concepts emerged from these workshops. In fact, I wouldn’t be surprised if some of them have been turned into thriving profitable businesses by now.

Here are just some of the ways in which water can be branded to remove it from the commodity category and to enable one to charge a price premium for it:

  • Taste/flavoring/carbonation
  • Color
  • Bottle/packaging shape/color/functionality
  • Source/story
  • Health qualities
  • Ways to drink
  • Temperature control
  • Size
  • Price
  • Suggested uses
  • Highly targeted markets
  • Bundling with other products
  • Distribution

And here are some general approaches to branding commodities, both B2B and consumer products:

  • Superior product or service consistency (quality control)
  • Superior product/service customization
  • Superior responsiveness (order fulfillment, technical support, customer service)
  • Unique bundling/unbundling of products/services
  • Superior range of products and services
  • Ingredient branding
  • Unique packaging
  • Unique distribution
  • Emotional branding (‘brand as a badge,’ superior purchase/usage experience)
  • Value chain integration
  • Identify your most important/profitable customers – conduct conjoint analysis to determine what they value the most

If you don’t think you can implement any of the above points of difference, that’s where brilliant creative marketing campaigns come into play, Evian’s Live Young (pictured) is one such example. When all else fails in creating a distinctive brand, imbue your brand with some emotional appeal or meaning solely through a creative communications campaign.

If you ever run into a brand manager or consultant who indicates that it is impossible to brand something in the “XYZ” category because it is a commodity category, politely thank that person for his or her advice and then apply one or more of these approaches.

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1 Comment

Kitty Criston
Twitter: kittycriston
on March 02nd, 2013 said

Branding as a marketing strategy has seen a significant increase in interest in recent years due to a variety of factors.

Companies are now fully realizing the importance of creating strong brands that provide real customer benefits so they can avoid the vicious practice of continual price slashing and cost reduction due to the downward pressure that exists in commodity markets. They’re discovering that it is desirable to compete on more than just price and volume.

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