Another way to gain a foothold in the market

Eddy P. Kasdiono, Contributor, Jakarta

Almost every second of our waking hours we are bombarded with a myriad of advertisements from every kind of media. They come in all sorts of themes, from the simple and basic ads promoting the advantages of different products to humor or even slapstick comedy.

Advertising is only one form of the marketing efforts that fight for a share of consumers' mind. It is also a part of a larger "battle" known as branding in marketing jargon. In today's modern marketing, branding consists of a wide range of sophisticated techniques involving brand managers, ad agencies and research companies doing grueling hours of work to create and back up brands.

Success in branding offers a number of advantages, like measurability and traceability in marketing; control in pricing and more opportunities to increase market share. Of course, all this leads to a greater possibility of higher margins once the brand is established.

In today's highly competitive economy, branding, which heretofore was common in the category of fast-moving consumer goods, is now also used for commodities.

For consumers with strong buying power, product quality, including health related features or benefits, and prestige are among the important factors. Price seems to be the last thing on their minds.

In a mature market, branding becomes necessary because consumers are extremely choosy. In this close-to-saturation stage, it is no longer sufficient to offer bulk or unbranded commodities.

As an illustration, one can easily check the shelves of any supermarket in the city. Here, for several years now, what used to be commodities -- tea and coffee, for example -- are now marketed using true branding that incorporates packaging, advertising, etc. One leading brand of instant tea -- Sariwangi -- has been a phenomenal success in the country along with its famous, universally accepted and easy-to-relate slogan: "Togetherness and intimacy of family."

However, apart from the successful branding of several commodities like tea and coffee, the branding of other commodities has been relatively difficult, as most consumers do not perceive any real advantages.

One instant rice -- Tara Nasiku -- failed because consumers did not find it more convenient to consume in comparison with unbranded rice or the more established instant noodles. On the other hand, Thailand is relatively more successful with its branded rice products, which are imported and sold in several supermarkets in some of Indonesia's major cities. For the branding of flour, Bogasari, a major flour producer, is also enjoying some success by differentiating each of its variants. For milk-based products, differentiation has been easier. Various ingredients have been added and communicated as vital nutrients for growth and development, such as DHA (Docosahexenoic Acid) and AHA (Alpha-hydroxy Acid).

Eggs are also being marketed as brands based on differentiated benefits or contents, such as cholesterol-free eggs and eggs with Omega 3, which is believed to be good for the health. It would not be surprising, therefore, if in the near future eggs containing DHA and AHA also enter the market.

Just like the branding of fast-moving consumer goods, branding enhances "impersonal" commodity items. A step beyond simple benefits or "functional utility", a brand gives such items an image that is related to the emotions and aspirations of consumers. Related advertising campaigns further strengthen their personality so that the brand is strongly embedded in consumers' minds. Also, in marketing jargon, a successful brand creates a long-term and sustainable competitive advantage.

Craton, a manager at FutureBrand's -- a renowned marketing consultancy company -- said: "The first and foremost strength of any product, including commodities, is its features or content that cannot be or are extremely difficult to copy." Indeed, such unique features make it easier for consumers to differentiate and for marketers to capitalize on real as well as perceived advantages.

Consumers are known to take three factors into mind before deciding on a purchase. First is a product's functions and benefits. Second is its quality in comparison with similar products, which requires some kind of proof regarding the product's superiority. Finally there are the emotional or psychological advantages, such as "boosting" the buyer's status and so forth.

Another no-less-important aspect is that a promise made in an advertisement should never be a false promise, because today's consumers are smart and word-of-mouth can very quickly ruin a product's image once there is a credibility gap or, worse, if a promise cannot be kept.

Transforming a common commodity into a branded product is admittedly not an easy task. Apart from the arduous work of creating the brand and the related packaging and marketing communications, the real challenge lies in highlighting the product's competitive advantage and turning this added value into a preferred benefit. Obviously, the promotional budget cannot be small as it must also cover educating the target market.

Commodity branding also has to be consistent with other rules of marketing, one of which is to focus on the retail level as the spearhead for distribution channels. In the case of major supermarkets such as Hero, Goro and Makro, they have also jumped on the bandwagon by branding commodity items -- sugar, for example -- using their names. Hence, enter brands like "Hero Sugar", "Goro Sugar" and so on.

D'Angelo, a senior manager at FutureBrand's, suggested two strategies in the marketing of commodity items. First is to brand and market them just like any fast-moving consumer product in order to reach quality-conscious consumers. In this way the products can be sold in various packages, from the smallest to the giant-sized packs, for premium prices.

Second is marketing the same items in unbranded packaging, which is more appropriate for less-developed markets or for consumers who opt for lower prices and are less concerned about brands. Both strategies should be executed in such a way as to avoid any internal rivalry, in marketing jargon "cannibalism", within products that are marketed both with and without brands.

Similar to brands that have been successful, commodity branding is a long-term investment and a total commitment to delivering the high-profile promise. For consumers to recognize that your brand of rice, flour or sugar is totally different and genuinely beneficial, a total maintenance of brand through the entire marketing mix -- including advertising and promotion -- is called for. Only then will your customers be able to differentiate your brand. Ultimately, their choice will help your cash register ring more frequently.

The writer is a consultant at the MARS research agency.