Another way to gain a foothold in the market

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.