How important is branding when marketing manufacturing companies?
By Tom Dougherty
Here is a strange one right out of the theater of the absurd. Often, companies tell us that their product has become a commodity. So, how can brand help sell a commodity?
The answer is so simple it begs to make a dismissive sweep of the hand at the question. Brand is commodity is the only differentiator if you are marketing or selling a commodity. If you don’t invest in your brand, you might just as well shutter the windows and board up the door. All that you have left is price and convenience.
Most of the actions taken when marketing manufacturing companies turn out to be wrong. Many make mistakes because many don’t understand brand at all (and neither do many branding companies, for that matter). These marketers have been swallowing all the popular culture about the importance of branding but have unfortunately got caught up in a meaningless model that creates no preference. It is the old idea that brand is simply a means of differentiating a product or service so that the customer will remember it. Identity is important, but it is only the façade of a brand.
The Ultimate Commodity
Let’s look at a commodity category. Take paper clips — the ultimate commodity. A box of paper clips sits on everyone’s desk and yet almost no one knows the brand name or manufacturer that made them. The paper clip manufacturer relies on distribution and price to sell its wares and, to make matters wore, most also create the private label brands that inevitably create the price point. This is the epitome of no-frills branding
In other words, they sell a commodity whose price point is determined by the private label product they also supply. “No Frills Brand” defines the market.
The reason for this debacle is that the manufacturer believes it is selling paper clips. In fact, it is selling organization and simplicity. After all, no one needs a paper clip as a desk ornament. However, we all use the clever little device when we want to organize papers (temporarily) or attach something to a folder (temporarily). The temporary part separates paper clips from staples (which is a more permanent solution) as a product, but they certainly compete in the same category. They are both fasteners.
Today, paper clips compete in only a few ways. The color of the box, the material of the clip (plastic or metal), the size of the clip, the quantity of the contents, and the price point are the only differentiators. The category is not led by innovation. The latest innovation in this legacy category is colored clips, either a plastic injected clip or a vinyl color coating over a metal clip.
Think about how lost this category is. They have abandoned all hope of preference based on utility and instead have tried to instill a fashion element into a category of utility. The category itself does not carry permission for such emotional intensity because no one has built a brand. Instead, they have built a sales model where the real battle for customer is fought with the gatekeepers of the big box office retailers. (Read a market study on differentiation here)
Stop Being the Lowest Common Denominator
So how should they do it differently? What should you do when marketing manufacturing companies? First on the agenda is to get out of their own way and stop playing the game of lowest common denominator. We know from experience that brand preference is an emotional conduit. It arises without the cogent knowledge of the end user. It is not a cognitive choice, even though they will rationalize why they purchased the clips. The rational reason is an afterthought not a purchase driver.
A winning paper clip brand is not about paper clips. It is all about the purchaser. As consumers (and businesses) seek to reaffirm their own sense of identity, they naturally prefer products that, in their own minds-eye, seem to be targeted at people or businesses like themselves.
What they seek is to reaffirm their own self-concept and every little bit of help they can get towards that goal creates preference. There is an elasticity element in the price point, to be sure, but the high end of that stretch is not found in a product benefit but rather in a personal benefit that answers the question “ Who buys this?”
Branding A Commodity — Brand Anthropology
This is where brand anthropology comes in to play, even in a category like paper clips. If you want to influence prospects and get them to prefer your product and pay more for it, you need to understand their lives and to what they aspire to become. This knowledge is scientifically available to those who know how to glean it, but it is not a simple process of focus groups and U&A studies. (Read a market study on branding a commodity and manufacturing here)
Once you uncover these precepts, or core beliefs, it is incumbent on the brand to infuse those emotional cues in the product, packaging, promise and innovation.
It is an easy fix to make a brand package look different from the competition. Standing out as a box of paper clips is not difficult. What is difficult is making that difference a reflection of the highest emotional intensity. Everything must reflect that intensity and any extraneous messages, be them intentional or implied, must be minimized or eliminated.
It works. Brands are known to bump the market leader out of first place. It does not happen often because it means reevaluating everything and few brands have the courage to do that. Those that do, we call them clients.